Risk Reversal

Long call + short put (or vice versa)

What is Risk Reversal?

Risk Reversal Selling an OTM put and buying an OTM call (bullish) or vice versa. Synthetic stock-like exposure with no upfront cost if strikes are equidistant.

Complete Definition

Selling an OTM put and buying an OTM call (bullish) or vice versa. Synthetic stock-like exposure with no upfront cost if strikes are equidistant.

Related Terms

Synthetic Stock Collar

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