- synthetic option
- A combination of a futures contract and an option, in which one is bullish and one is bearish. Chicago Mercantile Exchange Glossary
Financial and business terms. 2012.
synthetic option
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Synthetic replication — is the process by which a financial asset s payoff is exactly replicated by trading other securities. [citebook|title=Applied Equity Valuation|author=T. Daniel Coggin, Frank J. Fabozzi|year=1998|publisher=John Wiley and Sons|id=ISBN 1883249511]… … Wikipedia
synthetic — A derivative position which is created synthetically by using other derivative contracts. For example, the creation of a synthetic long future by the purchase of a call option and the sale of a put option with the same exercise price and expiry… … Financial and business terms
Synthetic Call — An investment strategy that mimics the payoff of a call option. A synthetic call is created by purchasing the underlying asset, selling a bond and purchasing a put option. The strike price on the put option is equal to the face value of the bond … Investment dictionary
Synthetic Forward Contract — A position in which the investor is long a call option and short a put option. The synthetic forward contract requires that both options be held simultaneously by a single investor, that have the same strike price and expiration date. This… … Investment dictionary
Synthetic — A financial instrument that is created artificially by simulating another instrument with the combined features of a collection of other assets. For example, you can create a synthetic stock by purchasing a call option and simultaneously selling… … Investment dictionary
synthetic position — A hedging strategy combining futures and futures options for price protection and increased profit potential; for example, by buying a put option and selling (writing) a call option, a trader can construct a position that is similar to a short… … Financial and business terms
synthetic stock — An option strategy that is equivalent to the underlying stock. A long call and a short put is synthetic long stock. A long put and a short call is synthetic short stock. Bloomberg Financial Dictionary … Financial and business terms
synthetic call option — A combination of a long futures contract and a long put, called a synthetic long call. Also, a combination of a short futures contract and a short put, called a synthetic short call. Chicago Mercantile Exchange Glossary … Financial and business terms
synthetic put option — A combination of a short futures contract and a long call, called a synthetic long put. Also, a combination of a long futures contract and a short call, called a synthetic short put. Chicago Mercantile Exchange Glossary … Financial and business terms
Synthetic Dividend — A type of incoming cash flow that an investor creates with certain financial securities to produce a dividend like payment stream that resembles the periodic cash receipts from a dividend paying stock. For example, suppose an investor owns shares … Investment dictionary
