SYNTHETIC LONG FUTURES | bull strategy

Synthetic Long Futures

Example: Buy call; sell put
Market Outlook: Bullish
Risk: Unlimited
Reward: Unlimited
Increase in Volatility: Does not affect the position strongly
Time Erosion: Does not affect the position strongly
Break-Even Point (BEP): Strike Price of Long Call + Net Premium Paid

The synthetic long futures is an options strategy used to simulate the payoff of a long futures position. It is entered by buying at-the-money calls and selling an equal number of at-the-money puts of the same underlying futures and expiration date.

This is an unlimited profit, unlimited risk options trading strategy that is taken when the options trader is bullish on the underlying security but seeks a low cost alternative to purchasing the futures outright.

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