An Options Lesson

Hi Shoppers,

Just a quick lesson/reminder on your option synthetics.

Options synthetics involve combining two of the three (calls, puts and stock) to synthetically create the third.

Having this list below committed to memory will help make you a better trader 

Here they are …

 

      • Long stock = long call + short put
      • Short stock = short call + long put 
      • Long put = long call + short stock
      • Short put = short call + long stock
      • Long call = long put + long stock
      • Short call = short put + short stock 

 

If you know these synthetics, you will know your risk and can better manage your trades.

Now go enjoy your long weekend.

Thanks for Reading … See You Next Tuesday,

Licia Leslie

Licia Leslie

Licia Leslie

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About the Author

Licia Leslie

Licia Leslie

Former CBOE floor trader and CIO at Karman Line Capital. Author of ‘The Option Traders Hedge Fund’ with over 30 years of options trading experience.

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