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 ?
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.
More importantly for a coffee futures trader this would present an opportunity to go long a synthetic futures contract at .