How Do Arbitrage Opportunities Arise from Discrepancies in the IV Surfaces of Different RFQ Providers?

Arbitrage opportunities occur when the quotes from two different providers imply a violation of a fundamental pricing relationship, such as put-call parity, or when the implied volatility for a synthetic position is cheaper than the outright option. A sophisticated trader can exploit this by simultaneously trading the mispriced options across the two RFQ providers, locking in a risk-free profit.