A long call with a short put at one strike pays the same as a long future at that strike
Take a call bought and a put sold at one strike and expiry. At expiry the call pays when the index is above the strike, and the put costs when it is below. Above the strike the position gains for each point the index rises, and below it loses for each point the index falls, the same as a long future.
Put call parity gives the price relation. For European index options, the call minus the put equals the discounted difference between the future and the strike. Rearranged, the strike plus the call minus the put, grown at the interest rate, gives the synthetic future price. Nifty index options are European and cash settled, which is what lets parity tie their prices to the future.
The chart draws the expiry payoff of the synthetic on the 30 Jun 2026 chain. It is the straight line of a long future. Any gap between the synthetic price and the actual future comes from interest, dividends and the bid and ask costs of the two option legs.
The two forms differ in cost and margin, not in direction. Options carry premium, and STT on a sale and on exercise. The future carries daily mark to market. The choice between them turns on those differences, not on a view of the index.
The synthetic long has the same downside as the future. A short put can lose a large amount if the index falls, so the risk is not smaller than the future's. This page uses the term to explain parity, not to suggest a position.
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study