CME's single-stock futures rev up to overtake ‘ugly’ options trade

New cash-settled contracts with EFP facility could be an appealing alternative to reverse conversions Dealers looking to optimise equity funding costs and balance sheet usage often resort to a complex option structure known as a reverse conversion, or revcon.The trade involves shorting a stock and then selling a put and buying a call on the same name. This creates a synthetic long forward position. The stock sale releases cash and locks in an options implied financing rate, which can be cheaper Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe You are currently unable to print this content. Please contact info@risk.net to find out more. You are currently unable to copy this content. Please contact info@risk.net to find out more. Copyright Infopro Digital Limited. All rights reserved.You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.If you would like to purchase additional rights please email info@risk.net Sorry, our subscription options are not loading right now Please try again later. Get in touch with our customer services team if this issue persists. New to Risk.net? View our subscription options If you already have an account, please sign in here. Most read articles loading... Back to Top