Risk Reversal

Options Intermediate NIFTY Options BANKNIFTY Options Stock Options

Strongly Directional - Bullish or Bearish

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Quick Reference

Strategy Type Synthetic Directional Position (Long Call + Short Put or Vice Versa)
Market Outlook Strongly Directional - Bullish or Bearish
Risk Profile Unlimited Risk on One Side (Short Option Side)
Reward Profile Unlimited Profit Potential on Directional Side
Time Horizon 2-8 weeks
Capital Requirement Medium to High (Margin for Short Option)
Margin Type SPAN + Exposure for Short Leg
Best Used When Strong directional conviction with desire to reduce or eliminate net premium cost

When to Use This Strategy

Strong directional conviction with desire to reduce or eliminate net premium cost

India-Specific Notes

Lot Sizes

NIFTY 25 units per lot
BANKNIFTY 15 units per lot
Stock Options Varies by stock

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