Synthetic trading involves using financial instruments to replicate the performance of traditional assets without direct ownership. Common strategies include synthetic long and short positions, synthetic call and put options, and synthetic straddles. These approaches allow traders to achieve specific investment goals, manage risk, and adapt to various market conditions without the need to directly own or short the underlying assets.

In the realm of synthetic trading, the Take Profit (TP) level is a predetermined price point at which a trader sets an order to automatically close a position, thereby securing profits once the market reaches this favorable threshold. The breakeven point is the price level at which a trader neither makes a profit nor incurs a loss. For example, in a synthetic long stock strategy, the breakeven point is calculated by adding the net premium paid to the strike price. Mastering the art of setting these levels is crucial for traders aiming to navigate the complexities of synthetic trading with precision and confidence.