Reverse Conversion Calculator
A reverse conversion (reversal) combines short stock with a synthetic long (long call, short put at the same strike)—often discussed in the context of box and parity trades.
Short Stock Position
Synthetic Long Stock
Trade Summary
Enter option details to see payoff diagram
Reverse conversions are typically used for arbitrage. Ensure you understand the risks and costs including interest and dividends.
Net Premium
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Strike Price
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Commonly asked Reverse Conversion questions
What is a reverse conversion?
Short shares paired with long call and short put at the same strike and expiry—economically related to synthetic positions and parity.
Why trade it?
Professionals sometimes use it to capture small dislocations between cash, borrow, dividends, rates, and option prices—after all costs.
What costs matter?
Stock borrow fees, interest on margin, dividends (short owes divs), commissions, and early assignment risk on the short put.
How does this relate to a box spread?
A box combines bull/bear verticals; reverse conversions are one building block in parity and arb discussions.
Is this common for retail traders?
Opportunities are often tiny and infrastructure-heavy; most retail users model it for learning rather than execution.
Synthetic long stock reminder?
Long call + short put at the same strike/expiry mimics stock directionality (before carry and dividends).
Related Calculators
Daily Cumulative P&L
$33,989.51+$32,609.07
Avg Trade: $60.80
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Best Performing
Morning Breakouts
82% Win Rate
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