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What is Risk Reversal

Risk reversal is used as an indicator of the instability between a call option and a put option. Is used by investors to measure markets perception rather than use the price. A high risk reversal indicates that the call option is more volatile than the put option, and a low risk reversal is where the put option is more volatile than the call option.

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Term created / updated 2010-09-21 15:18:28

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