A combination of long and short positions in financial instruments, in order to mimic the the risk/ reward profile of another instrument. For example, a synthetic asset could be generated by replicating the payout and exposure of a short futures position by going short European-style call options and long European puts with identical strikes and expiration dates. Also, synthetic index options can be created either through positions in the underlying and futures contracts, or with a basket of vanilla options.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Comments