I am having trouble understanding the following synthetic relationship:
Synthetic long put option = Short underlying + long call
Now, if XYZ is at 40, and I short XYZ at 40 and also purchase the 40 call, then:
Short position benefits if underlying goes down, but the long call loses value at the same time. So do I really want the underlying to go down? What exactly should the underlying do for this position to work in my favor? In a long put, I want the underlying to go down, but here I am not able to come to a conclusion.