Lesson 6 of 7
These payoff diagrams show how to create synthetic option or underlying positions through combining calls, puts, and the underlying.
A long call and a short put position is similar to being long a stock. A long put and a short call position is similar to being short a stock. A long stock and a long put position is similar to being long a call option. A long call and a short stock position is similar to being long a put option.
