Risk Reversal – Conviction-Based Directional Bet

Risk Reversal is a directional strategy where a Call is sold and a Put is bought, often at near-zero cost. It carries unlimited risk on one side and unlimited profit on the other. When to use: Use this strategy only when you have strong directional conviction and are prepared for volatility. Historic Example: In October 2024,

was expected to decline toward ₹1350. • Sell 1450 Call @ ₹20 • Buy 1350 Put @ ₹20 Net premium ≈ Zero Profit & Risk: Max Profit = Unlimited if price falls sharply Max Loss = Unlimited if price rises sharply Key takeaway: Risk Reversal is powerful but dangerous — it should be used only with strong conviction and disciplined risk awareness. 📌 Disclaimer: This content is for information only and not investment advice. Investments in securities market are subject to market risks. Read all the related documents carefully before investing. Please consult a SEBI-registered advisor before making any investment decisions.