Long Synthetic Future

Long Synthetic is a strategy to be used when the investor is bullish on the market direction.

This strategy involves buying a Call Option and selling a Put Option at the same Strike price. Both Options must have the same underlying security and expiration month.

Long Synthetic behaves exactly the same as being long on the underlying security.

The investor going for Long Synthetic strategy expects payoff characteristics similar to holding the stock or futures contract. It has the benefit of being much cheaper than buying the underlying outright.

Investor View: Bullish on direction of the Stock / Index.

Risk: Unlimited.

Reward: Unlimited.

Breakeven: Strike Price +/- net premium paid/ received.

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