You currently have a short futures position in the S&P 500 contract. Which of the following set of trades results in a synthetic long equity position? A) Short Treasuries + Long S&P futures B) Long Treasuries + Long S&P futures x2 C) Long Treasuries + Long S&P futures
B? You need a long treasury position and a long futures position to equitize the cash.
B
B
B
B
B
B
B
I remember the long treasuries + Long S&P Futures but why X2?
If he’s short futures he needs to go long to offset those. Then he must go long to get positive equity exposure.