An option which is virtually constructed by trading the underlying asset and borrowing or lending, without buying or selling the option being replicated. This technique applies the put-call parity methodology where the risk and reward profile of a position is stimulated by utilizing three complementary positions; one of which is in an opposite option (a put if the synthetic is a call, or a call in opposite case). The other two positions are a cash position and an asset (like a stock) underlying the option.