A neutral option strategy (in essence, it is a short straddle strategy) that is based on two legs involving selling two at-the-money calls for every 100 shares bought. The risk profile of a short call synthetic straddle replicates that of a short straddle. This strategy represents a bet on low volatility. Short call synthetic straddles are limited profit, unlimited risk positions that are created when the investor expects that the underlying price would be much less volatile in the near future.
While this strategy typically involves stock options, other types of underlying asset can also be used such as ETF options, index options, options on futures, and so on.
For more on this option strategy, see: short call synthetic straddle: construction and risk/return profile.
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