Chapter 06 · Section 6.1
Synthetic long underlying position
A synthetic long underlying position can be created by combining a call and a put. Of the choices listed below, which will yield a synthetic long underlying position?
d) short call high exercise & long put high exercise.
No. A short high exercise call and a long high exercise put will give you a synthetic short position, not a long synthetic.
a) long call low exercise & long put high exercise.
b) long call low exercise & short put low exercise.
c) short call high exercise & short put low exercise.
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