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.