Synthetic Long Stock

Description

Buying an ATM Call and selling an ATM Put.

Trading Logic

Mimics stock ownership with less capital requirement.

Practical Example

Stock at $100. Buy $100C, sell $100P.

P/L Curve

Chart Description
  • X-Axis: Stock price at expiration
  • Y-Axis: Expected P/L ($)
  • Green area: Profit; Red area: Loss