Silver Price Analysis: XAG/USD risk reversal hits lowest since October 2020 on put demand
Silver’s one-month risk reversal, which measures the spread between call and put prices, fell to -2.825 for the week ended on April 02, Friday – the lowest level since October 2020 – extending the decline from the Feb. 26 high of 7.425, indicating increased demand for put options.
A put option gives the purchaser the right but not the obligation to sell the underlying asset at a predetermined price on or before a specific date.
Therefore, one-month risk reversal's drop to the lowest since October suggests investors are adding bets to position for weakness in the white metal.
It should, however, be noted that silver picks up bids to $25.03, up 0.28% intraday, amid broad US dollar weakness by the press time. In doing so, the commodity rises for the third consecutive day.
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