Disclaimer
Analysis Techniques & Strategies
The position involves buying a Call and selling a Put at a strike price near the trading price of the underlying asset. Like any long asset position the risk and reward are unlimited. However, the cost difference can be substantial. A Synthetic Long option position requires only 20% percent margin on the Put option sold, plus the cost of the Call option bought. This can be substantially less expensive than buying the underlying stock on margin at 50% of the current trading price.