Fiduciary Call

A fiduciary call is a sophisticated synthetic options strategy that creates call option exposure through the combination of stock ownership and put option purchases, demonstrating the fundamental put-call parity relationship while providing alternative execution methods for bullish strategies. This advanced approach involves simultaneously purchasing the underlying stock and buying a put option at the same strike price, creating a position that replicates the exact payoff profile of a long call option while maintaining the benefits and obligations of stock ownership. The strategy is particularly valuable when call options are overpriced relative to the synthetic equivalent, when investors want to maintain dividend rights and voting privileges, or when specific tax or margin considerations favor synthetic construction over direct call purchases. Professional traders and institutional investors use fiduciary calls for arbitrage opportunities, when building complex multi-leg strategies, and when market inefficiencies create pricing advantages for synthetic positions over direct option purchases. The strategy requires understanding of carrying costs, dividend timing, and early assignment risks while providing identical economic exposure to traditional call options with different operational characteristics. Risk management involves monitoring the relationship between synthetic and actual option prices to identify profit-taking or adjustment opportunities

If NIFTY is at ₹25,800, set up: Buy NIFTY at ₹25,800, Buy ₹25,800 Put for ₹110, creating total investment of ₹25,910 with payoff identical to ₹25,800 Call option, providing unlimited upside potential above ₹25,910 and maximum loss limited to ₹110 while maintaining stock ownership benefits.