What is a Synthetic Option?

A synthetic call option is the simultaneous purchase (or sale) of a put option and the purchase (or sale) of a stock, both of which have the same underlying.

Synthetic call option

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A synthetic call option is the simultaneous purchase (or sale) of a put option and the purchase (or sale) of a stock, both of which have the same underlying.
Chinese name
Synthetic call option
Foreign name
synthetic call option
Classification
Proper noun
Subject
financial
Synthetic call option
For example, buy a synthetic call option: buy a XYZ put option on April 3 75 and buy 100 shares of XYZ; sell a synthetic call option: sell a XYZ put on April 3 75 Put option to sell 100 shares of XYZ.
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