41.3 Lessons learnt

What have we learnt?

  • Buying synthetical shares means you buy a call (right to buy shares) and sell a put (obligation to buy shares). 
  • The goal of this strategy is to invest little to no money and to benefit from a rise in the price of the underlying value.
  • Generally, the strategy is set with a minimum 3-month expiry time to allow for a positive development in the underlying value.
  • The strategy, tends to work best when selecting strike prices at or around at the money level. You are looking to benefit from the call option going up in value due to a rise in intrinsic value. The time value is financed by the sold put option.
  • The maximum profit of this strategy is unlimited, and as the objective is to not outlay any money when setting up the strategy your yield easily can reach double numbers in case the underlying value goes up.