A Long Combo is an options strategy that replicates the payoff of holding a long position in the underlying stock, using options instead of buying the stock directly. It typically involves buying an Out-of-the-Money (OTM) call option and simultaneously selling an OTM put option on the same underlying asset and expiry. The premium received from selling the put offsets the cost of buying the call, making the strategy capital-efficient. Long combos are used by traders with a bullish outlook who want leveraged upside exposure with limited upfront capital.
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