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.
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
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.