946 
TABLE B-1. 
Equivalent strategies. 
This Strategy is equivalent to 
Call purchase 
Put purchase 
Long stock 
Short stock 
Naked call write 
Naked put write 
Bullish call spread 
(long call at lower strike/ 
short call at higher strike) 
Bearish call spread 
(long call at higher strike/ 
short call at lower strike) 
Ratio call write 
(long stock/short calls) 
... and is also equivalent to ... 
Straddle buy (long call/long put) 
Appendix B 
This Strategy 
Long stock/long put 
Short stock/long call (synthetic put) 
Long call/ short put (synthetic stock) 
Long put/ short call (synthetic short sale) 
Short stock/short put 
Covered call write (long stock/ short call) 
Bullish put spread 
(long put at lower strike/ 
short put at higher strike) 
Bearish put spread 
(long put at higher strike/ 
short put at lower strike) 
Straddle write (short put/short call) 
Ratio put write (short stock/ short puts) 
Reverse hedge (short stock/long calls) 
or buy stock/buy puts 
Butterfly call spread Butterfly put spread 
(long 1 call at each outside strike/ (long one put at each outer strike/ 
short 2 calls at middle strike) short two calls at middle strike) 
All four of these "butterfly" strategies are equivalent 
Butterfly combination Protected straddle write 
(bullish call spread at two (short straddle at middle strike/ 
lower strikes/bearish put spread 
at two higher strikes) 
long call at highest strike/ 
long put at lowest strike