Strategy

Reversal (Reverse Conversion)

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Short stock, short put, long call for arbitrage

What is Reversal (Reverse Conversion)?

Reversal (Reverse Conversion) The opposite of a conversion: short stock, short put, and long call at the same strike and expiration. Like a conversion, it exploits mispricing relative to put-call parity. If options are underpriced relative to the stock, a reversal captures the arbitrage profit.

Complete Definition

The opposite of a conversion: short stock, short put, and long call at the same strike and expiration. Like a conversion, it exploits mispricing relative to put-call parity. If options are underpriced relative to the stock, a reversal captures the arbitrage profit.

Related Terms

Conversion Synthetic Stock Box Spread

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

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