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Originally Posted by TastyTrade
Rather than buying 100 shares of stock, traders can reduce their buying power requirement by selling an At the Money (ATM) Put option and simultaneously purchasing an ATM Call option. However, this yields no downside protection should the price of the stock fall. Today, JJ Kinahan, Tom Sosnoff and Tony Battista explain how a "synthetic" Covered Strangle (Short Call, Short Put) can keep capital requirements low, increase your Maximum Return on Capital and keep your probability of profit high! Find out proper strike selection for your short strangle and "synthetic stock" in this episode! Watch now!
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Introduction to Synthetic Trading Strangles
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