The Options Risk Reversal is a proprietary metric calculated by SpotGamma which shows the difference in implied volatility (the expected percentage range over the next year based on option prices with 68.3% confidence) between select calls minus puts.  Basically, the Options Risk Reversal tells you how expensive puts are relative to calls.  Larger negative numbers indicate more bearishness, which can swing back more positive and lead to an upward price reversal.  Conversely, less negative numbers indicate more bullish sentiment, often marking the near-term top of a market.

Advanced: Dynamics

This metric can be interpreted with different applications, such as measuring how expensive calls are relative to puts. For example, if this metric is sharply negative, then call skew might be underpriced and worth buying (skew means differences and implied volatility for different strikes on the same date). 

Another interpretation of a negative Risk Reversal reading would be that puts are overpriced. But yet another is that while puts are getting more expensive, that there might be some inertia to this expansion of put skew, and that it would likely be able to continue enough for a gamma scalp; in trading, a gamma scalp is when a net long option position delta-hedges in order to lock in profits from that move and neutralize some risk.

One of the dynamics this shows is whether aggressors (those hitting the bid or ask with their order volume) are using OTM (out of the money) options in mostly a bearish or bullish way. As a trading strategy, a bullish risk reversal would be an option trade where one writes a 25-delta put and buys a 25-delta call. For stocks, delta can be thought of as directional exposure; factoring out nonlinear dynamics, each delta is immediately worth one share of the underlying for stocks.

If this metric is positive, then aggressors are putting more pressure on OTM puts, which makes long OTM options relatively more expensive. What that means is that higher demand for long calls causes IV% (implied volatility) to increase, and likewise demand for long puts causes IV% to increase. This would also suggest expanding skew on whatever side is most under demand. 

This risk reversal measurement can be used to set up a couple different types of good trades, such as going long on that expanding call skew, or fading it and taking the good prices on the basis of a resistance play.