An option trading strategy that involves the combination of stocks or futures with options to create a delta-neutral position. A synthetic straddle can be set up using calls or puts. Using puts, it can be created by purchasing a given number of shares (long stock) for every long put (a put held/ purchased). For example, an investor may purchase 50 shares of stock for every put he holds. The combination of 50 long stock and one long put will result in a synthetic long call. The synthetic straddle is formed by combining the synthetic long call with another long put.

Using calls, a long call and a synthetic long put (long call plus short stock) also creates a synthetic straddle.

A synthetic straddle is a nondirectional strategy whereby the position profits from substantial moves of the underlying in either direction (upward or downward).