How did you do taking the quiz on Option Synthetics? In case you want a refresher, here’s an article I wrote about them that is a good summary: What everybody ought to know about Option Synthetics. We can use an easy equation to remember the synthetic relationships: C = U + P The relationships can be summarized in this short table: 1. Long Call = Long Stock + Long Put (C = U + P) 2. Short Call = Short Stock + Short Put (-C = -U – P) 3. Long Put = Long Call + Short Stock (P = C – U) 4. Short Put = Short Call + Long Stock (-P = -C + U) 5. Long Stock = Long Call + Short Put (U = C – P) 6. Short Stock = Short Call + Long Put (-U = -C + P) Armed with this information, let’s go through the quiz: 1. How would you create a synthetic SHORT CALL? That’s #2 on our summary: Short Stock + Short Put 2. How would you create synthetic LONG STOCK? That’s #5 on our summary: Long Call + Short Put 3. How would you create a synthetic LONG PUT? […]