ZEBRA Strategy
Zero extrinsic value stock replacement strategy
What is ZEBRA Strategy?
ZEBRA Strategy Zero Extrinsic Back Ratio — a strategy designed to replicate stock exposure with zero extrinsic value. Typically constructed by buying 2 ATM calls and selling 1 ITM call (for bullish) or buying 2 ATM puts and selling 1 ITM put (for bearish). The position behaves like 100 shares with defined risk and zero time decay at inception.
Complete Definition
Zero Extrinsic Back Ratio — a strategy designed to replicate stock exposure with zero extrinsic value. Typically constructed by buying 2 ATM calls and selling 1 ITM call (for bullish) or buying 2 ATM puts and selling 1 ITM put (for bearish). The position behaves like 100 shares with defined risk and zero time decay at inception.
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