SYNTHETIC LONG PUT | bear strategy

Synthetic Long Put

Example: Buy call; sell futures
Market Outlook: Bearish
Risk: Limited
Reward: Unlimited
Increase in Volatility: Helps position
Time Erosion: Hurts position
Break-Even Point (BEP): Sale Price of Underlying - Premium Paid

A synthetic long put is created when short stock position is combined with a long call of the same series.

The synthetic long put is so named because the established position has the same profit potential as long put.

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