A synthetic option is a synthetic position that is constructed without actually buying or selling the option. Synthetic Long Call, Synthetic Short Call, Synthetic Long Put and Synthetic Short Put are the four possible synthetic option positions.
Scope of the risk estimate
This page describes a family of positions or a hedge. Exact profit, loss and breakeven depend on the specified legs, valuation date, contract terms and any underlying portfolio. A portfolio hedge also depends on basis and correlation; protection is not guaranteed. Do not infer an exact payoff or a risk-free arbitrage from the strategy name alone.
