short ITM put

Does anyone know what a short ITM put's synthetic equivalent is?

 

A short put is equivalent to a covered call position at the same strike (i.e. long stock and short call with the same strike price as the put).

 

Even if the short put is ITM?

 

A covered call can be ITM too. You can create the same ITM short put by selecting the appropriate strike to set up a covered call.

 

It doesn't matter whether it is ITM, ATM or OTM. Synthetics always use the same strike(s).

For example, say the stock is at 50. If you have a short 60 put then it is ITM. A synthetic position would be long stock + short 60 call.

In other words, an ITM short put is equivalent to an OTM covered call.

 

Simplified example of MTE's explanation:

Long 100 shares XYZ @ 50
Short 1 Jul 60 call @ 1

vs

Short 1 Jul 60 put @ 11

Run the expiration values for any price.
P&L is identical.