risk reversal


An indicator of the volatility difference between a call option and a put option. Risk reversal is used because it is more helpful in this situation to see the volatility rather than the price. A high risk reversal indicates that the call option is more volatile than the put option, and the opposite is true for a low risk reversal. This information is used by investors to get a reading on the markets, and to help them decide how to invest.
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risk retention group (RRG) risk seeking