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. ...

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