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Premium: Optionalysis: Put-Call Parity and Synthetic Long/Short Positions through Options

You could go "pure" long in a stock in two ways:

• Buy the stock, or buy the future

• Buy a call and sell a put at the same strike price (a "Synthetic" long)

The first is obvious. The concept of going long means you benefit when the stock goes up and lose when it goes down. A purchase (stock or futures) ensures that.

The second isn't obvious. But . . .

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