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 one call and investing the present value ( PV) of the exercise price. The call value equals C=S+P-PV( k). The New York Times Financial Glossary

Financial and business terms. 2012.

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