Nov 2, 2025 · To create a synthetic long futures contract on a stock, buy a call with a $60 strike price and, at the same time, sell a put with a $60 strike price and same expiration date.

Mar 21, 2025 · Learn how to replicate or replace derivative payoffs through synthetic positions, exploring the intricacies of arbitrage strategies in derivative markets, payoff replication, and potential market …

This page explains the logic and calculation of call option profit/loss at expiration, payoff diagram, and break-even. See the same for short call (inverse position) and for put option.

Oct 11, 2022 · Understand how to calculate call and put option payoffs with step-by-step examples, diagrams, and formulas. Ideal for CFA and FRM exam prep.

Jul 9, 2025 · Investors use synthetic call options to replicate the payoff of a call option when direct calls are not available or attractive. This approach is particularly advantageous for those who already own …

There are additional costs associated with option strategies that call for multiple purchases and sales of options, such as spreads, straddles, and collars, as compared with a single option trade.

Apr 8, 2025 · The Synthetic Call Strategy, as discussed in this blog, offers the opportunity for maximum profits by replicating the payoff of a traditional call option through a combination of long stock and …

By combining a perpetual future with a protective put option, traders can replicate the payoff of a long call, while retaining the flexibility to close positions easily and optimize their outcomes.

Aug 13, 2025 · How Does a Synthetic Call Work? A synthetic call is a combination of a long stock position and a put option purchased on the same stock. Essentially, this setup is a payoff function …

Apr 20, 2025 · Synthetic Option Strategy for Puts: A short position of the asset or futures combined with a call option, replicating the payoff of a regular put option. The concept of put-call parity is at the core …