A strategy equivalent in risk to purchasing a put option where an investor sells stock short and buys a call.
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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.