Re-establishing an original position taken by an option buyer, undoing whereby a previously made conversion or reversal of an option from one type to another. For example, in case an investor sells an underlying stock short, aiming to convert a long call into a synthetic long put, the long call can be “broken out” by covering the short position in the underlying stock, i.e., a long position need to be taken in that stock again.
November 13, 2023
