Gain exposure to the price movements of a particular stock without actually shorting the stock Alias Short Combination, Combo Strip Descriptions An investor who is synthetically short a stock will typically hold a short call option and a long put option on that stock with the same expiration date and strike price. The net effect […]

A synthetic put is a financial derivative that combines a call option and a short position in the underlying asset to replicate the payout of a traditional put option. Description The call option has a strike price that is below the current market price of the underlying asset, while the short position in the underlying […]

Similar to a straddle but with a stronger bearish bias achieved by purchasing twice as many puts. The stock must move in order to generate money, but it will now profit more from a downward movement than from an upward one. Description If the price of the underlying security falls significantly, the value of the […]

This trade will only profit or lose if the stock moves below Leg 1 or above Leg 2 rather than between the strikes at expiration. It behaves like a short synthetic future when it is further away from expiration. Alias short call and put combo, a call and put spread Description Involves selling a call […]

Slightly bearish, you want the stock to go down to Leg 2 and then stop. Alias Front Spreads with Puts, Ratio Vertical Spread Involves selling a greater number of put options on a particular security than the number of put options that are purchased. This strategy is used when the trader expects the underlying security […]