synthetic put

Synthetic put

A strategy equivalent in risk to purchasing a put option where an investor sells stock short and buys a call.

Converted Put

The purchase of a call option and the short sale of the underlying asset. This is effectively the same as buying a put option because one makes a profit if the underlying asset decreases in price. For this reason, a converted put is also called a synthetic put.

synthetic put

The combination of a call option on a commodity and the short sale of the same commodity with the effect being the same as the purchase of a put option.
References in periodicals archive ?
To investors who expect a deeper decline, we suggest another strategy: a synthetic put, which provides the same attractive features as a synthetic call, but for a different market outlook.
The synthetic put option has the following tax items.
To recap, the synthetic call option will produce interest expense plus gain or loss from stock trading, and the synthetic put will produce interest income plus gain or loss from short selling.
26 Bifurcation of Put Option -- Sum (Not Future Value) of Tax Items Mean Interest Income on Synthetic Put $4.
Analysis of Put Option Measured Over 2000 Simulations Mean of Future Value Mean of Sum Difference (Tax-Policy (Current-Law (Current Law Tax Items from Synthetic Put Ideal) Deferral) Less Ideal) Interest Income $5.
This term is used to distinguish it from a synthetic put, which is selling MBS forward and buying MBS calls.
A synthetic put and normal put have the same profit profile.
Throughout his career, Jim has been a leader in innovating high grade products for issuing and investing clients, including structures such as synthetic put bonds, continuously offered retail notes and index-like corporate bonds," Kabatznick said.
Approximately $126 million of the 2005A bonds will be synthetic put bonds, swapped to BMA fixed-receiver bonds on May 15, 2013.
It has included converting a substantial component of the forward sale positions into synthetic put options.
The company also has synthetic puts on over 72 million pounds of copper.
The Company has had in place a price protection program consisting of puts and synthetic puts for a portion of its own copper production and the copper production of SPCC.