Options Strategies
Synthetic Long Put
Strategies Long Call + Short Stock (Also referred to as Synthetic Long Put)
Component Short stock and buy at-the-money call
Potential Profit
  • When the stock price is below the break-even point
  • Substantial, equals to the break-even point minus stock price
Maximum Loss
  • When the stock price is above the break-even point
  • Limited to the premium paid
Time Value Impact Negative
Break-even Strike price minus premium paid
Remarks Compared with short-selling on stock only, the upside loss potential is limited by the Long Call Position.
  Net Position -1 Stock at 200 +1 Feb 200 Call

Component Buy ABC Feb $200 Call, pay $20, and short ABC stock at $200
Net Premium Pay $20
Break-even $200-$20=$180
Profit when Stock price is below $180
Potential Profit $180 - stock price
Potential Loss $20
Time Value Impact Negative