AUD/USD risk reversals drop to four-month low on put demand

One-month risk reversals on AUD/USD, a gauge of calls to puts, fell to a four-month low of -2.025 on Monday, indicating investors are adding bets (buying put options) to position for weakness in the Aussie dollar.

The gauge topped out at -0.525 in early September and has been declining ever since. 

The negative number is a result of put options or bearish bets drawing a higher premium than calls or bullish bets. 

AUD/USD is trading largely unchanged on the day near 0.7015, having peaked above 0.74 on Sept. 1.