In Case You’d Forgotten- The Lowdown on the Synthetic
This trade involves buying a call (7300 debit 14.5) and paying for it by selling a put (7050-credit 15). Entry cost,therefore, is a tiny credit of 0.5, plus the margin required for the short put. I’d be looking for a quick turnaround, as this is directional. FTSE closed around 7300 on Friday, and these options expire on 19th May.
Tonight’s Prices
The call(which we own) is 73, the put(which we sold for 15) is 3.
In summary
We thus have a massive massive profit of 70, on a zero cost trade,using maybe £1,000 of margin. If 70% in half a week is not to your taste, you may wish to look elsewhere.
