Two definitions of the word “synthetic” are: produced artificially devised, arranged, or fabricated for special situations to imitate or replace usual realities These definitions can describe “Synthetic Positions” in option trading. To understand synthetic...
Let me ask you a question. Which position is more risky? Selling a Covered Call Selling a Naked Put Most people would say selling a Covered Call is a great investment strategy, but selling a Naked Put is terribly risky. If you understand Option Synthetics, you'll know...