Risk Reversal
If there’s a stock that you think will go up and you are more than happy to buy it at a lower price, this is the strategy for you. A risk-reversal is an option position that consists of being short (selling) an out of the money put and being long (i.e. buying) an out of the money call, both with the same maturity. A risk reversal is a position which simulates profit and loss behavior of owning an underlying security; therefore it is sometimes called a synthetic long....