Market conditions for Risk Reversals

tricky69 · December 5th, 2007, 7:53 am

Can anyone tell me what market conditions will make RR move ? Or more importantly what would cause a difference to occur in my model compared to another traders model ??And under what conditons would a 10dta RR move more than a 25dta RR ??

tricky69 · December 6th, 2007, 7:34 am

Let me explain this question a bit better - i know the value of RR drops as spot gets lower.. but there has to be a time when spot gets to a level where you started to get buyers for RR in the same way you do when people start the think the spot rate is too low... I just wanted to know what a good indicator is for RR prices value changing ?