"How to Trade a Synthetic Short Stock in Singapore ?"
If you believe a stock is overvalued but don’t want to short shares directly, the Synthetic Short Stock is one of the cleanest bearish strategies in options trading. This structure lets you profit when a stock falls, while using options instead of borrowing shares — perfect for high-income traders in Singapore who want controlled downside exposure.
Quick question for you 👇 Have you ever wanted to short a stock… but hated the idea of unlimited risk?
What Is a Synthetic Short Stock?
You combine:
1️⃣ Sell a Call Option 2️⃣ Buy a Put Option
Same strike. Same expiration.
This creates a position that behaves almost exactly like shorting 100 shares — but using options instead of stock.
Why Traders Use It
✔️ Replicates short stock exposure ✔️ No need to borrow shares ✔️ Cleaner structure than naked shorting ✔️ Uses ~$1,000 per trade with proper sizing ✔️ Defined structure when managed correctly
This is the “professional way” to express a bearish view without doing something reckless.
Real ~$1,000 Example (AAPL)
AAPL is trading at $200.
A trader might:
1️⃣ Sell the 200 Call for $5.00 2️⃣ Buy the 200 Put for $5.00
Net cost ≈ $0 (or a small debit/credit depending on pricing).
Now pause and think:
👉 If AAPL drops — you profit almost like short stock 👉 If AAPL rises — the position moves against you
Same behaviour as shorting shares, but built with options.
How You Profit
1️⃣ AAPL drops sharply
The put gains value quickly. ✔️ You profit from the downside move.
2️⃣ AAPL drifts lower over time
Delta works in your favour. ✔️ You benefit from steady weakness.
3️⃣ AAPL rallies strongly
The short call moves against you. ✔️ Risk must be managed with sizing and exits
This is why professionals never short emotionally — they short structurally.
Why Singapore Professionals Use This Strategy
✔️ Efficient way to express bearish views ✔️ Avoids traditional short-selling mechanics ✔️ Powerful in downtrending markets ✔️ Fits disciplined ~$1,000 sizing ✔️ Commonly used by experienced options traders
My Honest Take
Most traders only know how to buy.
Professionals know how to profit when markets fall — calmly, logically, and without panic.
Synthetic Short Stock is not for guessing. It’s for clear conviction.
Let me ask you 👇
When markets fall, do you usually: A) Panic B) Look for opportunity
Comment A or B — I’m curious.
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