synthetic put

Synthetic put

A strategy equivalent in risk to purchasing a put option where an investor sells stock short and buys a call.

Converted Put

The purchase of a call option and the short sale of the underlying asset. This is effectively the same as buying a put option because one makes a profit if the underlying asset decreases in price. For this reason, a converted put is also called a synthetic put.

synthetic put

The combination of a call option on a commodity and the short sale of the same commodity with the effect being the same as the purchase of a put option.