--- title: "What are synthetic futures and a synthetic long | RupeeCase" description: "A synthetic long future is a long call and a short put at the same strike and expiry, and its expiry payoff matches a long future at that strike." source_url: "https://www.rupeecase.com/learn/questions/synthetic-futures" --- A long call with a short put at one strike pays the same as a long future at that strike Expiry profit and loss for one lot of a call bought and a put sold at the same strike, priced at the settle prices of 10 Jun 2026. A long future bought at the strike draws the same straight line. Source: NSE end of day data, computed by RupeeCase. As of 10 Jun 2026. 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](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) What are synthetic futures and a synthetic long?A synthetic long future is a long call and a short put at the same strike and expiry, and its expiry payoff matches a long future at that strike. Put call parity links the prices of the two, so any gap between the synthetic and the actual future is a question of costs and interest, not a free trade. LGo deeper ## Where Learn teaches this. [Go deeperDelta: speed, hedge ratio and the probability shortcut8 min, Beginner](/learn/path-14/module-14-7-delta)[Go deeperPut call parity and synthetic positions9 min, Intermediate](/learn/path-14/module-14-10-put-call-parity) SSources ## Go to the source. 3 sources, NSE the most cited The publisher of each source listed below. Source: Module undefined source list. 1. [NSE option chain page (this page reads dated end of day files only)](https://www.nseindia.com/option-chain) NSE 2. [NSE, equity derivatives contract specifications (expiry cycle, lot size and strike rules)](https://www.nseindia.com/static/products-services/equity-derivatives-contract-specifications) NSE 3. [SEBI investor education, Understanding derivatives](https://investor.sebi.gov.in/understanding_derivatives.html) SEBI ?Questions people ask ## Related questions. 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