Discussion in 'Options' started by drcha, Apr 9, 2010.
Short 1 OTM put
Long 2 farther OTM puts
Long 100 shares
Hmm, I must confess to not being able to put a nice sexy options name on it, but, synthetically your delta's are equivalent with two long call positions.
Two pieces are cheaper than four, something to think about.
Long stock + 1 long put = long call
Short put + 1 long put = short put vertical
So you have a short put vertical and an ITM long call. There is no specific name for this particular position.
2 long calls
Bull put spread + a long underlying with a protective put
=bull put spread + synthetic call. As mentioned above, in terms of delta, a bullish (positive) stance.
yes, but the delta is certainly not equivalent to two long calls. That would be the case if the puts were ITM, correct ?
I would call it a Put Backspread and Long Stock
I'd call it a put protected commission generator (the synthetic)
Since the bull spread has a constant value outside of the strikes, the synthetic call is the dominant position.
So essentially, the risk profile is similar to one long call. The return is gassed above the put spread and reduced below it by the amount of the spread's net gain or debit.
Separate names with a comma.