# Option Arbitrage Opportunity [closed]

Could you please explain me whether there is an arbitrage opportunity in this situation (added below)?

• I advise you play around with various options of shorting and buying the asset and the option and see what happens in the two scenario's. – Bob Jansen Dec 18 '20 at 15:43

## 1 Answer

On an expiration basis, your put protected long underlying makes money above $80 and you have a locked in loss of \$5 below \$75. Note that long underlying plus long put is synthetically equal to a long call. Pretending no carry cost or dividend, your position is the same as buying the \$75 call for \\$5 and the P&L is the same as stated above.

There's no arbitrage.