: Synthetic Long Stock and Option Trading: Evidence from Stock Splits examines how capital-constrained traders use this strategy to maintain market exposure.
: You have unlimited upside but also face "uncapped" downside risk identical to owning the stock. Risk Reversal (Different Strikes) : sell put and buy call strategy
: Often established for a net credit or zero cost, as the put premium sold typically covers the call premium bought. : Synthetic Long Stock and Option Trading: Evidence
: The Synthetic Long Stock Guide by HKEX provides a structured breakdown of the investment costs, maturity constraints, and margin requirements. : The Synthetic Long Stock Guide by HKEX
: Sell an Out-of-The-Money (OTM) put and buy an OTM call.
: Used by investors who are bullish but want a "margin of error" before the put obligation kicks in. Key Risks to Consider
: Risk Reversal - Options Math for Traders details how this variation exploits "skew" (the price difference between puts and calls) to potentially enter trades for a net credit. Strategic Overview Synthetic Long Stock (Same Strike) :