Synthetic forward position


 

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Synthetic forward position

A forward position constructed through borrowing in one currency, lending in another currency, and offsetting these transactions in the spot exchange market.



Synthetic forward position

Similar Matches

Synthetic long call

Synthetic long call

A long stock position combined with a long put of the same series as that call.


Synthetics

Synthetics

Customized hybrid instruments created by blending an underlying price on a cash instrument with the price of a derivative instrument. It is a combination of security holdings that mimics the price movement of another single security (i.e., synthetic call: long position in a stock combined with a put on that position; a protected long sale; synthetic put: short position in a stock combined with a call on that position; a protected short sale).


Synthetic position

Synthetic position

A hedging strategy combining futures and futures options for price protection and increased profit potential. For example, by buying a put option and selling (writing) a call option, a trader can construct a position that is similar to a short futures position. This position is known as a synthetic short futures position, and shows a profit if the futures prices decline, and receives margin calls if prices rise. Synthetic positions are a form of arbitrage.


Synthetic stock

Synthetic stock

An option strategy that is equivalent to the underlying stock. A long call and a short put is synthetic long stock. A long put and a short call is sythetic short stock.


Synthetic long put

Synthetic long put

A short stock position combined with a long call of the same series as that put.


Further Suggestions

Synthetic put
synthetic long stock


 
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