Synthetic positions - A position constructed in order that its cashflows and sometimes its risk / reward characteristics replicate those of another asset or liability. Such instruments are created either because certain users cannot buy the components separately or because an arbitrage opportunity allows the synthetic to be purchased (sold) more cheaply (expensively) than the straightforward product.
Synthetic positions : a position constructed in order that its cashflows and sometimes its risk / reward characteristics replicate those of another asset or liability. such instruments are created either because certain users cannot buy the components separately or because an arbitrage opportunity allows the synthetic to be purchased (sold) more cheaply (expensively) than the straightforward product.
Synthetic positions