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# Synthetic Long Call

A synthetic long call is created when long stock position is combined with a long put of the same series. It is so named because the established position has the same profit potential as a long call.

Married put and protective put strategies are examples of synthetic long calls.

Synthetic Long Call Construction |

Long 100 Shares Buy 1 ATM Put |

## Unlimited Profit Potential

The formula for calculating profit is given below:

- Maximum Profit = Unlimited
- Profit Achieved When Price of Underlying > Purchase Price of Underlying + Premium Paid
- Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid

Synthetic Long Call Payoff Diagram |

## Limited Risk

The formula for calculating maximum loss is given below:

- Max Loss = Premium Paid + Commissions Paid
- Max Loss Occurs When Price of Underlying <= Strike Price of Long Put

## Breakeven Point(s)

The underlier price at which break-even is achieved for the synthetic long call position can be calculated using the following formula.

- Breakeven Point = Purchase Price of Underlying + Premium Paid

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