Synthetic

What Does Synthetic Mean?
A financial instrument that is created artificially by simulating another instrument with the combined features of a collection of other assets.

Investopedia explains Synthetic
For example, you can create a synthetic stock by purchasing a call option and simultaneously selling a put option on the same stock. The synthetic stock would have the same capital-gain potential as the underlying security.

Related Terms

Call Option
Capital Gain
Constant Proportion Debt Obligation - CPDO
Put
Synthetic Lease
Underlying
More Related Terms

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