A Low-Risk Options Strategy: Synthetic Short Stock ☝

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Synthetic Short Stock Options Strategy. http://www.financial-spread-betting.com/ PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! The synthetic short options strategy utilises a long put and a short call to simulate the risk/reward setup of selling a stock short. There are times when you want to create a synthetic short stock position using options. You may not be able to borrow the shares to sell short the underlying… We are buying 1 at-the-money Put and selling 1 at-the-money Call at the same time.

How to Create a Synthetic Short Stock Position
example XYZ trades at $40
Buy 1 $40 Put for $100
Sell 1 $40 Call for $150

We can create a synthetic short stock position with options contracts. As opposed to using options as speculative instruments strategies like the synthetic short stock position can protect against market falls and unlike a covered call, a synthetic short option can offer a real alternative to selling and taking profits.

PLEASE NOTE THAT THIS IS AN ADVANCED TUTORIAL. – if you are having problems understanding the conceptS check out the full options course from the beginning.

Full Options Course at:


mhaddadi says:

Great Video, Maybe you can continue and explain how to defend this position if the price keep rising.

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