Synthetic Vertical Spreads

An interesting relationship that exists between different options in the market is that every strategy has a synthetic equivalent strategy that can be constructed using other options. This phenomenon is mostly a result of the <a href="https://ontt.tv/yLU7">put-call parity that</a> exists in the market and helps to <a href="https://ontt.tv/mKaRz">keep pricing efficient</a>. As we see with our potential AAPL trade today, it doesn’t really matter if we choose the ITM Call Spread or the OTM Put Spread - they’re essentially the same trade.