Put Call Parity — Put call parity is a fundamental relationship that must exist between the prices of a put option and a call option on the same underlying instrument with the same strike price and expiration date. If they are not the same then there is room… … Financial and business terms
Put–call parity — In financial mathematics, put call parity defines a relationship between the price of a call option and a put option both with the identical strike price and expiry. To derive the put call parity relationship, the assumption is that the options… … Wikipedia
put/call parity — The term used to describe the relationship between option and futures prices. By definition the prices of options and futures on the same underlying product must be linked due to the ability to synthetically create futures positions with the use… … Financial and business terms
put-call parity — Applies to derivative products. option pricing principle that says, given a stock s price, a put and call of the same class must have a static price relationship because arbitrage opportunities or activities will always reestablish such a… … Financial and business terms
Put-call parity relationship — The relationship between the price of a put and the price of a call on the same underlying security with the same expiration date, which prevents arbitrage opportunities. Holding the stock and buying a put will deliver the exact payoff as buying… … Financial and business terms
put-call parity relationship — The relationship between the price of a put and the price of a call on the same underlying security with the same expiration date, which prevents arbitrage opportunities. holding the underlying stock and buying a put will deliver the exact payoff … Financial and business terms
Parité Put-Call — La parité put call (Put Call Parity) définit une relation entre le prix d un call (option d achat) et celui d un put (option de vente), qui ont tous deux le même prix d exercice et la même échéance. La formule suppose que les options ne sont pas… … Wikipédia en Français
Parity — is a concept of equality of status or functional equivalence. It has several different specific definitions.* Parity (physics), the name of the symmetry of interactions under spatial inversion * Parity (mathematics) indicates whether a number is… … Wikipedia
Call option — This article is about financial options. For call options in general, see Option (law). A call option, often simply labeled a call , is a financial contract between two parties, the buyer and the seller of this type of option.[1] The buyer of the … Wikipedia
Covered call — Payoffs and profits from buying stock and writing a call. A covered call is a financial market transaction in which the seller of call options owns the corresponding amount of the underlying instrument, such as shares of a stock or other… … Wikipedia
The above illustration demonstrates a simple put-call parity relationship. Looking at the graph, we see that a long-stock/long-put position (red line) has the same risk/return profile as a long call (blue line) with the same expiration and strike price. The only difference between the two lines is the assumed dividend that is paid during the time to expiration. The owner of the stock (red line) would receive the additional amount, while the owner of the call (blue line) would not. However, if we assume no dividend would be paid to stockholders during the holding period, then both lines would overlap.