R

Ratio Calendar Combination

A strategy consisting of a simultaneous position of a ratio calendar spread using calls and a similar position using puts, where the striking price of the...

Ratio Calendar Spread

Selling more near-term options than longer-term ones purchased, all with the same strike; either puts or calls.

Ratio Spread

Constructed with either puts or calls, the strategy consists of buying a certain amount of options and then selling a larger quantity of more out-of-the-mo...

Ratio Strategy

A strategy in which one has an unequal number of long securities and short securities. Normally, it implies a preponderance of short options over either lo...

Ratio Write

Selling of call options in a ratio higher than 1 to 1 against the stock that is owned.

Resistance

A term in technical analysis indicating a price area higher than the current stock price where an abundance of supply exists for the stock and therefore th...

Return (on investment)

The percentage profit that one makes, or might make, on his investment.

Return if Exercised

The return that a covered call writer would make if the underlying stock were called away.

Reversal Arbitrage

A riskless arbitrage that involves selling the stock short, writing a put, and buying a call. The options have the same terms. See also Conversion Arbitrag...

Rho

The expected change in an option?s theoretical value for a 1 percent change in interest rates. See also Theoretical Value.

Risk Arbitrage

A form of arbitrage that has some risk associated with it. Commonly refers to potential takeover situations where the arbitrageur buys the stock of the com...

Roll Down

Close out options at one strike and simultaneously open other options at a lower strike.

Roll Forward (Out)

Close-out options at a near-term expiration date and open options at a longer-term expiration date.

Roll Up

Close out options at a lower strike and open options at a higher strike.

Rolling

A follow-up action in which the strategist closes options currently in the position and opens other options with different terms, on the same underlying st...