A THREAD ON OPTIONS SYNTHETICS, LONG READ:

With synthetics you can increase your returns as the margin requirements/costs are less. Everyone wanting to become a top trader needs to know this and get their concepts cleared because many people don't know what they're doing

(1/11)

Synthetics are formed by the mixture/combinations of any two of the following three.
1. Calls
2. Puts
3. Futures/Stocks

You don't even need to touch futures/stocks. Whatever kind of payoff graph you want, you can get via options only.

(2/11)
Fut buy + Put buy= Call buy
Fut buy + Call sell = Put sell
Fut sell + Call buy = Put Buy
Fut sell + Put sell = Call sell

Fut buy = Call Buy + Put Sell
Fut sell = Put Buy + Call Sell

Know this very well as this is must to know. Now I'll show you how to increase returns.

(3/11)
Synthetics will be used to handle margin requirements better thereby increasing your leverage.

For eg, you want to buy a stock you have to pay huge margin.

Instead of that you can buy an ATM call and sell an ATM put. Margins are drastically lower via options.

(4/11)
We cannot short stocks in India, we need to trade via futures. Some big traders like Sundar Sir, they don't like to trade in futures as they trade via collateral and mtm loss needs to be paid daily. Synthetics take care of that as u only have to pay the loss when booked.

(5/11)
To achieve the collateral benefits plus lower margins, if you want to sell a stock just do the exact reverse of everything I wrote for buying a stock via synthetics.

Selling a stock = Buying puts + Selling Calls.

Payoff graph will be exact same.

(6/11)
Some option sellers claim to understand options very well and they "HATE" option buying. This one's for them. 😂

They say buy fut and buy put for "hedging".

What they fail to realise is actually they've just bought a call via synthetics.

(7/11)
How do these guys have the audacity to say they "hate" option buying and are strictly against buying of options when they're doing the same via futures with their "hedge" ? 😂

You do what you want but then you cannot be against option buying if you trade in fut and hedge

(8/11)
If you buy a call profit is unlimited, but if no movement occurs then the option will deteriorate in value.

If you buy fut and buy put, and if stock doesn't move, the put goes to zero and fut doesn't give profit.

For Sell fut + buy call just do the reverse i.e. put buy

(9/11)
One more thing irritates me too much. These "covered call" guys fail to realise that they can achieve the same via only selling puts.

They buy fut and sell call to "hedge" paying two margin requirements.

Selling a put requires only one margin.

Opp for covered puts.

(10/11)
I hope I helped you clear some misconceptions/doubts regarding synthetics. Feel free to find out any mistakes in my thread and correct me if I'm wrong. I'm happy to learn/be corrected.

THE END

(11/11)

More from Aditya Todmal

Master Thread of all my threads!

Hello!! 👋

• I have curated some of the best tweets from the best traders we know of.

• Making one master thread and will keep posting all my threads under this.

• Go through this for super learning/value totally free of cost! 😃

1. 7 FREE OPTION TRADING COURSES FOR


2. THE ABSOLUTE BEST 15 SCANNERS EXPERTS ARE USING

Got these scanners from the following accounts:

1. @Pathik_Trader
2. @sanjufunda
3. @sanstocktrader
4. @SouravSenguptaI
5. @Rishikesh_ADX


3. 12 TRADING SETUPS which experts are using.

These setups I found from the following 4 accounts:

1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4.


4. Curated tweets on HOW TO SELL STRADDLES.

Everything covered in this thread.
1. Management
2. How to initiate
3. When to exit straddles
4. Examples
5. Videos on
Here are my top 10 best tweets of the week: 24th September.

• Stocks to buy & hold forever
• Companies which will always be in business
• How to 10x money in 10 years?
• Feedback of company employees
• MWPL & F&O ban list explained
• Tradingview free version tricks

Stocks one can buy and hold


These companies will always keep running, no matter if recessions come or not.


26% CAGR makes your money 10x in 10


Some life
12 TRADING SETUPS which experts are using.

These setups I found from the following 4 accounts:

1. @Pathik_Trader
2. @sourabhsiso19
3. @ITRADE191
4. @DillikiBiili

Share for the benefit of everyone.

Here are the setups from @Pathik_Trader Sir first.

1. Open Drive (Intraday Setup explained)


Bactesting results of Open Drive


2. Two Price Action setups to get good long side trade for intraday.

1. PDC Acts as Support
2. PDH Acts as


Example of PDC/PDH Setup given
Google Chrome has over 137,000 extensions.

But 95% of Traders are unaware of the best extensions for trading.

10 Google Chrome Extensions that will accelerate your trading ( all free ): 🧵

Collaborated with @niki_poojary

1. Pulse by Zerodha

Latest financial and market news from all major Indian news sources are aggregated in one place.

🔗
https://t.co/jQ5Lu1P1r3


2. Full Width Zerodha Kite Trading Platform

This extension will make your Zerodha kite trading app full-width for large-screen desktops and laptops.

Also adding some tweaks will help you stay more focused on trading.

🔗 https://t.co/HSmVxLxPNv


3. Zerodha Scrip Plus

Zerodha fullscreen trading with brokerage calculator and analysis options

- Brokerage Calculator
- Full screen trading
- Marketwatch and Holdings scrips analysis

🔗 https://t.co/ZOmAcvamRh


4. Jarvis - Zerodha Trading helper

Jarvis helps in managing your risk by giving you a consistency of pre-determined stop loss % and risk per trade.

Once you set these values in the plugin then it automatically sets the quantity of the trade.

🔗 https://t.co/qn2MvDkCdR

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... other sources who have been trying to shine on light on this grifter (as I have tried to do, time and again:


Example #1: "Still not seeing Sweden signal versus Denmark really"... There it was (Images attached).
19 to 80 is an over 300% difference.

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Example #2 - "Yes, I'm comparing the Noridcs / No, you cannot compare the Nordics."

I wonder why...

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Example #3 - "I'm only looking at what makes the data fit in my favour" a.k.a moving the goalposts.

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