synthetic call - Investment & Finance Definition
The purchase of an underlying security while a put option is simultaneously purchased on that security. If the investor thinks that the price of the underlying security will rise but still wants insurance against it moving lower, then a synthetic call is one way to accomplish that goal. The investor has effectively purchased a call option on the security that also includes income-related benefits such as dividends or interest that come from owning the underlying securities. The higher the put’s strike price is, the greater the insurance that is provided.