Synthetic Futures Contract
A position created by combining call and put options for the purpose of mimicking the payout schedule and characteristics of a futures contract. Investopedia Says:
A synthetic long futures contract is created by combining long calls and short puts. A synthetic short futures contract is created by combining short calls and long puts. In order for both combinations to be identical to a futures position, the options must have the same expiry dates and strike prices. Related Terms:
Call
Combination
Expiration Date
Futures Contract
Long
Put
Short
Strike Price
Synthetic |