: If the call has a higher strike price than the put, it is sometimes called a "risk reversal" or "collar," depending on the specific setup.
: Calculated as the Strike Price + Net Debit paid (or minus net credit received). buy call option sell put option
: It is used when you expect a sharp appreciation in the stock's price during the life of the options. : If the call has a higher strike
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This combination replicates the risk and reward profile of owning the underlying stock outright but typically requires significantly less upfront capital. Key Features of a Synthetic Long
: Substantial and similar to owning the stock; you face significant losses if the stock price falls, as you are obligated to buy the stock at the strike price if the short put is assigned.