Synthetic Short

Synthetic Positions Intermediate NIFTY BANKNIFTY FINNIFTY RELIANCE TCS HDFC Bank All liquid options

Bearish - equivalent to shorting stock

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Quick Reference

Strategy Type	Short Stock Equivalent - Put-Call Parity Position
Market Outlook	Bearish - equivalent to shorting stock
Risk Profile	Unlimited upside risk (short call obligation)
Reward Profile	Unlimited downside profit (long put)
Time Horizon	Any - commonly monthly for position trades
Capital Requirement	Lower than short futures (approximately Rs.50,000-80,000 per lot)
Best Used When	Want short exposure with capital efficiency, short selling restricted, need quick hedge implementation

Want short exposure with capital efficiency, short selling restricted, need quick hedge implementation

Note	Each synthetic short replicates shorting one lot of underlying

Put Purchase	0.05% on premium
Call Sale	0.05% on premium (if ITM at expiry, 0.125% on settlement value)
Important	Short call ITM at expiry attracts higher STT - consider closing before expiry

Short Call Margin	SPAN + Exposure margin required (can be substantial)
Long Put	Premium paid only (no margin)
Overall	Margin requirement similar to short futures
Naked Call Warning	Short call has UNLIMITED risk - margin requirements are significant

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