Put-Call Parity

Put-Call Parity,

What is The Meaning of Put-Call Parity?

Definition of Put-Call Parity: Pittal parity is the principle that explains the relationship between the price of a European input option and the same class of European call options, that is, on the same basis, the cost of the same exercise and the same maturity date.

  • Indicates a relationship between a buy / sell parity that should exist between the European input and call options with the same underlying asset, maturity and strike price.
  • The put / call parity indicates that the price of the call option means a particularly reasonable price for a put option that is equal to the cost of the same exercise and the same maturity (and vice versa).
  • When there is a difference between call and put prices, there are opportunities for mediation that make some traders profitable without any risk.

Literal Meanings of Put-Call Parity

Put:

Meanings of Put:
  1. Move or stay in a special position.

  2. Bring special terms and conditions.

  3. Throwing as sport (punch or weight)

  4. Flows in a certain direction (from the river).

  5. One shot or one weight

  6. Put the mean option

Sentences of Put
  1. I held my hand

  2. They try to make me feel good

  3. She set a women's record with 567 shots

  4. A small stream flows into the Warner Lakes in the southwest.

  5. Nichols posted 61.05 on his third attempt.

  6. By selling the input option, you agree to buy the shares from the input option holder at a specified price.

Synonyms of Put

place, settle, set down, set, situate, lay, put down, deposit, lay down, position

Call:

Meanings of Call:
  1. Give (child or animal) a specific name.

  2. Scream (word or words)

  3. Call or try to contact someone (person or number) by phone.

  4. Ask for or request help.

  5. Declare or decide that (an event, especially a meeting, strike or election) should take place.

  6. See (someone)

  7. (Referee or other official in the game) announces (ball, shot or other action) as indicated.

  8. Reason for execution (subroutine).

  9. A scream to use as a phone call or to get someone's attention.

Sentences of Call
  1. He called his daughter Hina

  2. I heard a terrible sound that came from your name

  3. Can I call again?

  4. Representatives of all three teams were invited to appear before the commissioner

  5. It seems that there is no other option but to hold general elections.

  6. I promised Celia that I would call the clinic

Synonyms of Call

whoop, appeal, plea, get on the phone to, sound, phone call, make a call to, get someone on the phone, summon, scream, get, telephone, social call, call together, cry, roar, name, order, entreaty, dial, telephone call, phone, bawl, assemble, place a call to

Parity:

Meanings of Parity:
  1. Same status or status, especially about status or payment.

  2. (Number) Strange or even.

  3. The fact or condition of having children.

Sentences of Parity
  1. Equal income between agricultural and industrial workers

  2. The relationship between breast cancer and parity was examined.

Synonyms of Parity

levelness, evenness, consistency, equality, parallelism, congruity, uniformity, unity, coequality, congruence, equivalence, sameness, correspondence