What is the name of this position?

[jamesbp]

Quote from donnap:

Your answer is incorrect. The 3rd post in this thread had a correct breakdown.

You do realize that if you match one long put with the stock for the synthetic call - there is only one long put left.

Donna

You may find both answers are correct. It is the traders choice which strike they remove the conversion [-u +c -p] at in order to determine the synthetic equivalent.

If you remove the conversion at the 70 strike; you get +70c / +70p / -80p

If you remove the conversion at the 80 strike; you get +80c / +2 70p / -2 80p

Have a go at putting all the positions in whatever analyser you use and see if there is any difference.

Have a good weekend.
James

 

[donnap]

Quote from jamesbp:

Donna

You may find both answers are correct. It is the traders choice which strike they remove the conversion [-u +c -p] at in order to determine the synthetic equivalent.

If you remove the conversion at the 70 strike; you get +70c / +70p / -80p

If you remove the conversion at the 80 strike; you get +80c / +2 70p / -2 80p

Have a go at putting all the positions in whatever analyser you use and see if there is any difference.

Have a good weekend.
James

Got it. You add an 80P to the stock and subtract it to form the spreads. I stand corrected. (see how easy it is)

However, I don't think that the second more cumbersome synthesis would be the choice of very many traders.

 

[talontrading]

what are you trying to accomplish with this position?

Quote from drcha:

Short 1 OTM put
Long 2 farther OTM puts
Long 100 shares

 

[jamesbp]

Quote from donnap:

Got it. You add an 80P to the stock and subtract it to form the spreads. I stand corrected. (see how easy it is)

However, I don't think that the second more cumbersome synthesis would be the choice of very many traders.

Nice job, dissection can be art as well as science ....