Options: Put-Call Parity
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Options: Put-Call Parity

Intuition Publishing Pty Ltd
Updated Sep 24, 2020

Combinations of call and put options can replicate outright long and short positions in an asset, and the put-call parity relationship ensures that there is no possibility of arbitrage between the synthetic option position and the outright asset position. We explain put-call parity in option pricing and discuss the principle of no arbitrage.

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