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Mon Oct 13 2008

Mon Oct 13 2008

Home >> Investor Resources >> Options >> The Long Synthetic

The Long Synthetic

This strategy is adopted by options buyers who are strongly bullish on the market direction.

A synthetic long position is created by purchasing calls and puts at the same time. Both the call and the put must have a common purchase price and expiration dates.

If prices drop, you will lose doubly. Your calls have expired worthless and the trader who bought the short position from you exercises it. You have to deliver the shares.

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