Explanation

A short position in a futures contract has a linear payoff that decreases as the underlying price increases. The payoff diagram is a straight line with negative slope.

Let's analyze the options:

• Long call + Short put (synthetic long): This creates a payoff similar to a long futures position, not short.

• Long put + Short call: This combination creates a payoff that:

  • When underlying price increases: short call loses money, long put expires worthless
  • When underlying price decreases: long put makes money, short call expires worthless
  • The payoff diagram is a straight line with negative slope, exactly matching a short futures position

This is known as a synthetic short futures position. The payoff (not profit) of long put plus short call perfectly replicates the economics of a short futures contract.