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Synthetics

• The process of creating identical payoffs to a given asset without using the asset itself. This is used in arbitrage.

• Customized hybrid instruments created by blending an underlying price on a cash instrument with the price of a derivative instrument.

 
 Embedded terms in definition
 Arbitrage
Asset
Cash
Derivative
Hybrid
Instruments
Underlying
Without

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Avoid having your ego so close to your position that when your position falls, your ego goes with it. - Colin Powell

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