advancedHigh RiskBearish
Synthetic Put
Short stock + long call = same risk profile as owning a put.
What is a Synthetic Put?
By combining a short stock position with a long call at the same strike, you replicate the payoff of owning a put option. If the stock falls, your short stock profits. If it rises, your call limits the loss. This is used when actual put premiums are too expensive or unavailable.
When to use it
Used when puts are not available (e.g., on hard-to-borrow stocks) or when the synthetic construction is cheaper than buying the put directly.
Structure
Short 100 shares + buy 1 ATM call, same strike.
Key Metrics
Max Profit
Stock falls to zero: strike × 100 − premium paid − borrow cost.
Max Loss
Premium paid (stock can only go so high before call kicks in).
Breakeven
Strike − premium paid.
Greeks Profile
Equivalent to a long put: delta negative, theta negative, vega positive.
Tips & Best Practices
- 1Watch out for borrowing costs on short stock — this eats into your effective premium.
- 2A real put is often cheaper and simpler than the synthetic equivalent.
- 3Used primarily by market makers for hedging and arbitrage.
- 4Understand the mechanics before trading synthetics — slippage and borrow costs matter.
See it in action
Model a Synthetic Put with a real ticker. See the P&L chart, heatmap, and exact breakevens.
Open Synthetic Put Calculator →