Name: Synthetic Short Stock
Setup: Sell (short) Strike A call and Buy (long) Strike A put
Bias: Bearish
Break-Even: Strike A + Credit received or – Debit paid
Max Profit: Limited: Underlying can only go to $0.00
Max Loss: Unlimited if the underlying climbs
Margin: Margin equals the requirement for the short call
Time Decay: Time decay is a neutral effect. It will have a positive effect on the short call but a negative effect on the long put
Implied Volatility: The effect of implied volatility is neutral. It will have a positive effect on the long put but a negative effect on the short call
Notes: None at this time
Featured in Trade Review: None at this time
