Options Strategy : Synthetic Long Futures

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/