Marty Bagasan Comment On Regulatory Notice 21-19
The sale of a call option and purchase of a put option with the same expiration date and strike price provides equivalent exposure to the price of a stock as a short sale. Despite this equivalence, this synthetic position does not currently create a short position that would be reportable under the current version of Rule 4560. The extent of use of this and other types of synthetic short positions is unknown. When a customer closes-out a short position by delivering shares borrowed from a member’s affiliate, the customer acquires an obligation to deliver shares to the affiliate in the future. The exposure from this loan obligation is substantially equivalent to a short position but the loan obligation is not a reportable short position under the current version of Rule 4560.