An investment strategy that involves purchasing an asset, issuing a bond against it, and purchasing a put option against that bond. Synthetic calls duplicate the profits that would be gained from call options, while accommodating losses using the put options should the bonds be worth more than the assets.
Related information about synthetic call:
- Synthetic Call Definition | Investopedia
An investment strategy that mimics the payoff of a call option. A synthetic call is created by purchasing the underlying asset, selling a bond and purchasing a put ...
- Synthetic Call Option Strategy
When a trader goes long a stock and long the puts as well, the configuration is known as a synthetic call. Traders use synthetic calls to limit the risk of a stock ...
- synthetic call - Invest Definition
synthetic call definition: The purchase of an underlying security while a put option is simultaneously purchased on that security. If the investor thinks that the price ...
- Synthetic Options Strategies by OptionTradingpedia.com
Probably The Most Comprehensive Explanation Of Synthetic Options Strategies In The World!
- Put/Call Parity and Synthetic Positions
That is, at the same strike prices, a synthetic call should cost the same as an actual call. Put/Call parity can differ only by trivial amounts such as trading costs.
- Strategy for Synthetic Call Options | 1option.com
In a Synthetic Call Option, the investor can create a pseudo call position by buying puts that equal the number of shares they own. Just like a call buyer can buy ...
- How to Create Synthetic Call Positions »
To start, we need to get the asset that we're trying to replicate (either the stock, put, or call) by itself and with the correct sign. Let's stick with our same example ...
- Synthetic Call - Financial Dictionary - The Free Dictionary
The purchase of an asset combined with the sale of a bond and the purchase of a put option on that asset. The strike price of the put is equal to the face value of ...