Bullish strategy · Intermediate

Synthetic Call

Market outlook Bullish

Long shares paired with a long put, replicating a long call's payoff while still holding the actual stock.

Semi-ProMedium risk30–90 days per put cycle

Greek profile

DeltaPositive
ThetaShort
VegaLong
GammaLong
RhoMedium

Payoff and Greeks mirror a protective put almost exactly, since the construction is identical — long stock plus a long put. The distinction is framing: this position is chosen to replicate a call's risk profile for an existing shareholder, not primarily as portfolio insurance.

→ Read the full Greeks 101 guide

When to use it

You want to hold stock for dividends, voting rights, or existing cost basis but still cap downside like a call buyer would

Best for

Stockholders who want call-like risk exposure without liquidating their equity position

Capital needed

High: 100+ shares plus put premium, versus the modest premium-only outlay of buying a call outright

Management

Roll the put forward as expiration approaches; compare the recurring put cost against simply buying a call if capital efficiency matters more than share ownership

Maximum profit

Unlimited: (Stock price at expiration − Stock entry) − Put premium paid

Maximum loss

Limited: (Stock entry − Put strike) + Put premium paid

Break-even

Stock entry + Put premium paid

Key risks

Ties up full stock capital unlike an actual long call, which only risks the premium
Put premium is a recurring cost on every roll
Dividends and voting rights are the main offsetting benefit versus an outright call

Default legs

Buy 100 stock position
Buy 1 100 put at 5 premium

Reading the result

The graph recalculates from the visible legs. It is not a price forecast and does not model outcomes before expiration.

Maximum profit—

Maximum loss—

Risk / reward—

Break-even—

Position analyticsExpiry payoff

At expiryCurrent spot

Profit / loss at expirationPer complete position · 100 shares per option contract

Expiration scenarios
Price at expiry	Move	Profit / loss

Strike configurations

Synthetic Call variations

ATM synthetic call

ATM

Buy the put at a strike near the current stock price for the tightest downside floor.

Key difference: Highest recurring put cost, but the closest match to a true long call's risk profile.

Best for: Shareholders who want the position to behave as closely as possible to owning a call outright.

OTM synthetic call

OTM

Buy the put further below the current price, insuring only against a larger drop.

Key difference: Lower recurring cost, but more downside exposure remains before the floor engages.

Best for: Long-term holders who want a cheaper, partial floor rather than full call-equivalent protection.

Common questions

Synthetic Call FAQ

How is this different from just buying a call and selling the stock?Comparisons

Selling the stock and buying a call would free up capital and remove dividend/voting rights, but this position deliberately keeps the shares — it's for holders who want to retain ownership while capping downside like a call buyer.

Why not just call this a protective put?Setup

The mechanics are identical to a protective put; the name reflects the intent — replicating a long call's defined-risk profile for a shareholder who has decided to keep their shares rather than liquidate them.

Does this strategy still let me collect dividends?When to Use

Yes — since the shares are retained rather than sold, you continue to receive dividends and retain voting rights, which is the main reason to choose this over an outright long call.

What's the ongoing cost of maintaining this position?Adjustments

You pay the put premium every time you roll it forward to a new expiration, similar to a recurring insurance cost — this should be weighed against the benefit of retaining the shares.

Deep dive

Read the full Synthetic Call guide

Detailed explanations, management techniques, and real-world scenarios

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Quick reference

Strategy FAQ

Quick answers about when to use, capital needed, and key risks

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Model boundary

This calculator uses intrinsic value at expiration and entered premiums. It excludes implied volatility, Greeks, time decay before expiration, fees, tax, dividends, liquidity, margin, assignment and exercise behavior. Educational illustration only—not financial advice.

Build the legs