Risk Reversal (so also said in German; more rarely Risk Reversal Strategy)

A
Out of the money call option is purchased and at the same time an out of the money put option on the same underlying instrument is sold (purchase or sale of a call option combined with the sale or purchase of a put option, based on the same underlying instrument). – Both options – expire on the same date and – are based on exercise prices whose percentage distance from the forward price is the same at the time the contract is concluded. – If the transaction is based on foreign exchange, the market price of the risk reversals indicates how market participants estimate any changes in the value of the underlying currency, i.e., what their expectations are with regard to the exchange rate. – See Butterfly spread, Option, Strangle – Monthly Report of the Deutsche Bundesbank, October 2001, p. 34 ff.

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