Options Strategy : Synthetic Long Futures strategy is executed when a trader is bullish on underline futures contract .
But instead of buying a Futures Contract executes a Options Strategy : Synthetic Long Futures .
Synthetic Long Futures Strategy
Buy ATM Call
Sell ATM Put
The Trader instead of Buying a Futures Contract Buy ATM Call and Sell ATM Put of same expiry as underline Futures Contract .
Let me Explain with an Example :
A Trader instead of
Buying a Nifty Futures Contract of 26-Aug-21 : 16248
Buy ATM Call Strike 16200 of 26-Aug-21 : 113
Sell ATM Put Strike 16200 of 26-Aug-21 : 60
Synthetic Long Futures Strategy Formula
Price of Underline Futures – Strike Price of Call – Premium Paid + Premium Gain
16248 -16200 -113+60 = -5
Advantage :
1. Lower Margin than Long Futures
2. Lower Brokerage than Long Futures
Options Chain NSE : https://www.nseindia.com/option-chain
Also Read Options :https://financeloaninsurance.com/riskless-algo-strategy-reversal/