Anybody have a simple way of remembering the various methods of creating synthetic instruments?
i.e. Synthetic call= put + stock - riskless discount bond. Thinking through these makes my head hurt.
Can’t you just remeber the one formula and then jumble that around?
C + X/(1+r)^t = P + S
So
Synthetic Call = P + S - X/…
Synthetic P = C + X/… - S
Sythentic Stock = C+ X/… - P
mnemonics man. I’ve given this in another thread.
C0 + X 0/(1+R) = P 0 + S 0
should be read like the plural of the slang for “male genitalia” = “female genitalia”
Hasn’t failed me once plus promotes gender equality.
COX = PS. Nice one hahah
I just rearrange the formula.
Sip Pepsi = Be Cool
Awesome LOL.
SiP a CoKe
S= stock
P= put
C = call
K = bond
you’re welcome.
SP orty C o X
…whatever works, man.