Making a Synthetic Stock

Synthetic stocks are investments that replicate a stock’s return; in other words, they earn money from a company’s success despite having no ownership of the firm. Today, let’s go through the exercise of creating one so we can better understand just how capable the world of options truly is.

NOTE: As mentioned, this example is grossly oversimplified and doesn’t take into transaction costs nor contract sizes.

Intro/Outro Music: https://www.bensound.com/royalty-free-music
Episode Music: http://freemusicarchive.org/music/Podington_Bear/

DISCLAIMER:
This channel is for education purposes only and is not affiliated with any financial institution. Richard Coffin is not registered to provide investment advice and as such does not provide recommendations on The Plain Bagel - those looking for investment advice should seek out a registered professional. Richard is not responsible for investment actions taken by viewers.