looking at call put parity C+(X-F)/(1+r)^T = put therefore i would have thought C = long put long forward and short rf debt but according to CFAI if F > X you long debt instrument can someone explain why? cheers to all those tired and fed up. All will be over in 11 days. Joe

F > X and F=S(1+Rf)^T or F/(1+rf)^t = S. so you are buying the Debt instrument at its spot price? C = P + F/(1+Rf)^t - X/(1+Rf)^T Combination of borrowing X today to buying the debt instrument at the Spot today …

Using your equation, you have to rearrange to find synthetic call Synthetic Call = Put - (X-F)/(1+r)^t So if F > X, the (X-F) portion in that equation is negative, and two negatives = positive, so you go long the debt instrument. Make sense?

I get it now thanks thanks guys