Synthetic Short Stock
To create a short synthetic stock position, you simply buy an ATM put option and sell an ATM call option at the same strike price. This creates a bearish position with much less capital than shorting a stock.
Kirk Du Plessis
Apr 19, 2021
While most traders don't typically short stock, there are situations where using short stock can be beneficial in neutralizing your portfolio if it gets too long. However, shorting stock outright is capital intensive with margin. Today we'll show you how you can use options as a way to go synthetically short a stock with a fraction of the capital requirement.
No tags found.
