[sin-thet-ik] 
| 1. | of, pertaining to, proceeding by, or involving synthesis (opposed to analytic ). |
| 2. | noting or pertaining to compounds formed through a chemical process by human agency, as opposed to those of natural origin: synthetic vitamins; synthetic fiber. |
| 3. | (of a language) characterized by a relatively widespread use of affixes, rather than separate words, to express syntactic relationships: Latin is a synthetic language, while English is analytic. Compare analytic (def. 3), polysynthetic (def. 1). |
| 4. | Also, syn⋅thet⋅i⋅cal. Logic. of or pertaining to a noncontradictory proposition in which the predicate is not included in, or entailed by, the subject. |
| 5. | not real or genuine; artificial; feigned: a synthetic chuckle at a poor joke. |
| 6. | Jewelry.
|
| 7. | something made by a synthetic, or chemical, process. |
| 8. | synthetics.
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| syn·thet·ic (sĭn-thět'ĭk) adj.
[Greek sunthetikos, skilled in putting together, component, from sunthetos, combined, from suntithenai, to put together; see synthesis.] syn·thet'i·cal·ly adv. |
Synthetic
A financial instrument that is created artificially by simulating another instrument with the combined features of a collection of other assets.
Investopedia Commentary
For example, you can create a synthetic stock by purchasing a call option and simultaneously selling a put option on the same stock. The synthetic stock would have the same capital-gain potential as the underlying security.
Related Links
Options Basics Tutorial
Going Long On Calls
Put-Call Parity and Arbitrage Opportunity
See also: Call Option, Capital Gain, Put, Synthetic Lease, Underlying
synthetic syn·thet·ic (sĭn-thět'ĭk)
adj.
Relating to or involving synthesis.
Produced by chemical synthesis, especially not of natural origin.
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