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.

Position construction

Sell short 100 shares; Buy 1 call.

Profit potential

Maximum profit

Stock sale price minus the call premium paid, if the stock falls to zero.

Solid black: combined position. Dashed black: the stock position alone.
Graph showing the hypothetical profit or loss for the Synthetic Long Put option strategy in relation to the market price of the underlying security on option expiration date.

Try the Synthetic Long Put Calculator

The diagram and calculator use this example: Short 100 shares at $40; Buy 1 $40 call option at $2 per share. All options share one expiration and a 100-unit multiplier. Fees are zero in this example.

Limited Risk

Maximum loss

Call strike price minus the stock sale price, plus the call premium paid.

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Breakeven Point(s)

Breakeven at expiration

Stock sale price minus the call premium paid, provided that price is between zero and the call strike.

Before expiration and assignment

The diagrams and worked outcomes describe expiration payoffs, not an option’s market price before expiration. Time decay, implied volatility, rates, dividends and bid-ask spreads affect early closing values. American-style short options can be assigned early; a protective long option is not automatically exercised when a short leg is assigned. Closing or exercising one leg can change the remaining position’s risk.

Amounts are per share before fees. Multiply by the shares covered by the position; standard equity options usually cover 100 shares per contract. If a maximum profit or loss calculation gives a negative amount, use zero. These figures assume matching contracts held to expiration and do not include financing or early assignment.