Is this is the best position ever if you can do this...

Discussion in 'Options' started by lotfyisis, Oct 25, 2018.

  1. destriero

    destriero


    The synthetic long straddle is equivalent to the natural. Three comms involved.

    Say you're long XYZ from a cost-basis of 100 and the shares are trading at 140 in December. You want to book your gains but would prefer to defer the taxes. You short two of the Jan 150 calls at 7.00. You're synthetically short the 150 straddle, one contract, from 24.00 premium.

    There are reasons (above) to trade the synthetic, but understand that they are fungible. There is nothing to exploit there.
     
    Last edited: Oct 25, 2018
    #21     Oct 25, 2018
  2. Jones75

    Jones75

    I feel comfortable using it when I stay within the rules Graham layed out.
     
    #22     Oct 25, 2018