Synthetics


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Synthetics

Customized hybrid instruments created by blending an underlying price on a cash instrument with the price of a derivative instrument. It is a combination of security holdings that mimics the price movement of another single security (i.e., synthetic call: long position in a stock combined with a put on that position; a protected long sale; synthetic put: short position in a stock combined with a call on that position; a protected short sale).

Synthetic Investment

A combination of investment vehicles that, when used together, can create a profit. An example is an option spread, where one takes two or more positions in option contracts in order to profit from the difference in their prices. Likewise, one may create a synthetic index in order to outperform a real index. Institutional investors are the main creators of synthetic investments.
References in periodicals archive ?
9 million in 1993, form the most significant product group in the overall market for synthetic lubricant base stocks.
The system is "a clever and unique approach to develop synthetic bone scaffolds that are cell-responsive," comments Kristi S.
Several factors are behind the recent expansions in synthetic paper and the entrance of new players and products.
Selecting a flooring system that best suits your school's needs, whether it's wood or synthetic, can be an arduous process that requires patience and attention to detail.
Also, down drapes over you, eliminating cold, drafty areas, better than any synthetic.
While you probably know how a synthetic GIC works, don't make the mistake of thinking they're all created equal.
With either structure, the trust would have a secondary claim against the issuer of the wraparound guarantee in an amount representing the difference between the market value of the assets and the book value of the synthetic investment.
Other areas of work aim to improve formulations and processes, develop new uses, and generally protect the market from erosion by the synthetics.
Hybrid Synthetic and Cash CDOs: A Primer' is available on the Fitch Ratings web site at 'www.
At this point, "rubber chemistry" had come of age with the development of synthetics.
The adhesive should also guaranteethat synthetic implants or cartilage, which surgeons often wedge into the ear to replace bones and make other repairs, stay in place.
The European CDO market almost tripled last year, spurred by growth in synthetic transactions, most of which were arbitrage (95.