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Put/call parity. Same strike puts and calls are equal in price minus carrying costs. If they weren't you could use conversions and reversals to lock in free money.

Are you speaking of a same strike call and put? If so then the answer is no.

No need. They're the same. Hence the word equivalent.

No you don't. I was listening to a broker scream about what a scam the VIX options where when his call didn't make him as much money as he thought yesterday. The underlying for VIX derivatives is not VIX spot...

Reaganomics is a wonderful thing.

What's not to understand. The strategy is simply long the S&P500. Such a brilliant, simple, and elegant idea...except when it goes down, but I wouldn't worry about that.

Options in and of themselves are a zero sum game (like all derivative contracts). For every specific contract there is a winner and a loser. That being said I agree with archon that this information is next to meaningless. Options are financial vehicles that can be used to control risk...

Be careful or you'll find a lot of Condor groupies on your tail. They flock to ET in droves...

I thought debit = exposure with debit spreads...

Sorry Bob, I must have misunderstood you. In the first post on page 8 you describe buying calls and selling stock. My posts were in reference to that position. I apologize for wasting space here...

I'm not following. Are you referring to the synthetic on the long option or synthetic on the gamma scalp? When would the spread on spot be better than -edge on the natural? Thanks

Bob, I mean no disrespect to you nor your intelligence. However, I don't see how intelligence, experience, or knowledge of greeks has any relevance on the reality of synthetics. My post is specifically related to your post in which you state that you initially sell stock and buy twice...

I wouldn't agree that they're more dangerous but certainly less advantageous for the customer. You're right though. It is laughable that most brokerages (and exchange educational material) lists covered calls as a low risk conservative strategy and naked puts as a high risk aggressive strategy.

From a risk and reward perspective you are correct. A = B and B = A. Practically speaking there are commissions and spreads that exist when entering positions. If A = 1 spread and 1 commission and B = 2 spreads and 2 commissions and A = B from a risk / reward profile then it's pretty easy to...

I'm not sure I understand the question. Then again you might be jesting and I just don't get it. The synthetic is the one with an extra position.

None of this really matters to the main problem here. If we are in agreement that synthetics are real (and I hope we are) then you're "Covered Put Writes" as described above are exactly equivalent to a long straddle. Any adjustment you make after the fact (gamma scalping or otherwise) is...

No, you don't need to know synthetics or greeks to trade successfully if you're a good directional trader. However, having a better understanding of what you're trading will undoubtably help and not hurt one's success.

Just to clear my mind on Schwab. They let you do synthetic short calls but not natural. They don't let you sell puts (naked). Do they let you do covered calls?...nevermind, I think I know the answer.

Do a search on "gamma scalping" here on ET for info on the synthetic straddle you were refering to. People have claimed success with gamma scalping however, I've never had nor seen much profit with it. Probably just me...

I've found the primary reason for reading and posting on ET (and other boards) is for pure entertainment value.