Webinar: Option Conversions and Reversals

A stock position and a synthetic stock position aren’t priced in isolation — conversions and reversals show where the two connect and where they can diverge.

Conversions and reversals sit at the intersection of stock, options, financing costs and dividends. This webinar will explore how professional traders use the relationships between physical stock and synthetic stock to identify and understand relative pricing differences. During this session, OIC instructor Mat Cashman will cover an outline that includes:

• How put-call parity connects the prices of calls, puts and the underlying stock
• The difference between a conversion strategy and a reversal strategy
• How option prices can be used to calculate an implied forward stock price
• Why the implied forward price may differ from the current cash-market stock price
• How interest rates and the cost of carrying a stock position can affect conversion and reversal pricing
• How expected dividends and dividend timing influence call prices, put prices and implied forwards
• Key risks and practical considerations, including early exercise, assignment, transaction costs and execution across multiple legs

Register today to join Mat for this educational session and gain access to the complete library of on-demand OIC webinars.