Sentences with phrase «synthetic stock positions»

This is very useful in conjunction with risky leveraged investments like index futures or synthetic stock positions.

Not exact matches

Options traders who are more comfortable with call options can think of purchasing a put to protect a long stock position much like a synthetic long call.

The phrasing generally prohibits you short selling, or taking a position which is equivalent or gives you similar exposure, so synthetic shorts would be disallowed, as would any derivative position which benefits you if the company's stock drops.

If you are thinking about buying the common stock and your broker does not pass on borrowing costs to you, then it can be cheaper to use a synthetic options position.

If the stock is purchased at the same time the put trade is initiated, the trade or position is called a synthetic call.

Most importantly, it also gives the manager the right to replace his stock holdings with futures, other derivatives, and short & synthetic positions.