What is the primary objective of a Synthetic Long options strategy?

To replicate the payoff of a short futures position To generate consistent income through option premiums To hedge against potential market downturns To mimic the payoff of a long futures position

Which of the following combinations of options positions constitutes a Synthetic Long?

Sell ATM Call and Buy ATM Put Buy ATM Call and Sell ATM Put Sell Out-of-the-Money (OTM) Call and Buy In-the-Money (ITM) Put Buy OTM Call and Sell ITM Put

How is the breakeven point for a Synthetic Long strategy determined?

ATM Strike - Net Premium Received ATM Strike + Net Premium Paid Spot Price - Net Premium Received Spot Price + Net Premium Paid

What is the fundamental principle behind arbitrage opportunities in financial markets?

Exploiting differences in investor sentiment Predicting future market movements Capitalizing on price discrepancies between related assets Leveraging high-frequency trading strategies

Which of the following factors can significantly impact the profitability of an arbitrage opportunity?

Market volatility and investor risk appetite Government regulations and economic policies Transaction costs and execution efficiency Company performance and industry trends