Synthetic Futures Contract

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Synthetic Futures Contract

1. The purchase of calls and the sale of puts with the same expiration date and strike price.

2. The purchase of puts and the sale of calls with the same expiration date and strike price.

In both cases, the position creates the effect of holding a long position (for the first definition) or a short position (for the second) on a futures contract.
References in periodicals archive ?
Changing the World Cup from dirt to Tapeta was clearly a premature move, probably based on the false impression that racing in the US and perhaps elsewhere was headed for a synthetic future.
After reviewing previous scholarship and establishing the theoretical and methodological foundation of her own study, she applies a context-sensitive and functional approach to the use of verbs of cognitive attitude and model adverbs in Spanish, to the use of the Spanish modal verbs poder and deber, and to the use of the conditional form and the synthetic future.
Although interest rate swaps have been described as synthetic financial instruments and puts and calls can be combined to create synthetic futures contracts, we are unaware of previously created synthetic accounting events.
For example, a trader might initiate a long synthetic futures position, as above, and offset this by selling the actual underlying futures contract.