V. 20:4 (20-22): Q&A by Don Bright
Product Description
Q&A by Don Bright
REVERSE CONVERSION
In an article in STOCKS & COMMODITIES,
a practice called “reverse conversion”
was mentioned in relation to writing
options. Would you expand on this? —
Adrian
A reverse conversion, or “reversal,”
is simply a trade where you sell puts,
sell stock, and buy calls, thus doing the
opposite of a conversion. Reversals are
traded by floor traders who get full
interest on the short-stock valuation.
...continuded
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