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Short Synthetic

Psychology:

A short synthetic is most suitable when you want to sell a short stock position. This strategy involves selling a call option and purchasing a put option for an identical underlying asset and ending date. Although the short synthetic is used when the exercise price is identical, it is also used when the long call and short call have unique exercise values. When you use a short synthetic you are able to benefit from extra security and limit the costs associated with entering into the contract.

Risk / Reward:

Maximum Loss: Unlimited

Maximum Gain: Unlimited

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