as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
system
understanding the synthetic long put option
user
a long put - you have a small initial cost (the option premium) but profit as the stock goes down. you have no additional risk if the shock rises, even a lot. short a stock - you gain if the stock drops, but have unlimited risk if it rises, the call mitigates this, by capping that rising stock risk. the profit/loss graph looks similar to the long put when you hold both the short position and the long call.  you might consider producing a graph or spreadsheet to compare positions. you can easily sketch put, call, long stock, short stock, and study how combinations of positions can synthetically look like other positions. often, when a stock has no shares to short, the synthetic short can help you put your stock position in place.
assistant