O'Reilly logo

Trading Commodities and Financial Futures: A Step-by-Step Guide to Mastering the Markets, Third Edition by George Kleinman

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Buying options to protect futures

Buying options to protect futures involves buying a put with long futures or buying a call with short futures. This strategy is also known as creating synthetic options, because a put combined with a long futures is similar to a call, and the call in conjunction with the short futures is similar to a put. You can make a case that if you buy an at-the-money call option while simultaneously holding a short futures position (synthetic put), or you buy a put option while simultaneously holding a long futures position (synthetic call) that the overall position will act just like a put or a call (so why bother?). However, this can be a better strategy, because it gives you added flexibility, and I use it quite a bit. ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required