What is the name of this position?

Discussion in 'Options' started by drcha, Apr 9, 2010.

  1. drcha


    Short 1 OTM put
    Long 2 farther OTM puts
    Long 100 shares
  2. 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.
  3. MTE


    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.
  4. ajcrshr




    2 long calls
  5. 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.
  6. F112358


    doggy fashion?
  7. yes, but the delta is certainly not equivalent to two long calls. That would be the case if the puts were ITM, correct ?
  8. stoic


    I would call it a Put Backspread and Long Stock
  9. I'd call it a put protected commission generator (the synthetic)

  10. 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.
    #10     Apr 9, 2010