Synthetic Forward

Replicating traditional outright FX forwards by both buying and selling options

Long Synthetic Forward

A Long Synthetic Forward is a bullish directional strategy which is a combination of a Long Call and a Short Put with the same strike price and expiration.

Payoff Diagram:

Direction Assumption: Bullish

Maximum Profit: Unlimited

Maximum Loss: Unlimited

Breakeven Price: Price of Underlying during entry.

Theta: Passage of Time -> Neutral

Volatility: Neutral

Short Synthetic Forward

A Short Synthetic Forward is a bearish directional strategy which is a combination of a Long Put and a Short Call with the same strike price and expiration.

Payoff Diagram:

Direction Assumption: Bearish

Maximum Profit: Unlimited

Maximum Loss: Unlimited

Breakeven Price: Price of underlying during entry.

Theta: Passage of Time -> Neutral

Volatility: Neutral