October 9, 2019

What is Option Put-Call Parity?

Put–call parity defines a relationship between the price of a European call option and European put option, both with the identical strike price and expiry, namely that a portfolio of a long call option and a short put option is equivalent to (and hence has the same value as) a single forward contract at this strike price and expiry. This is because if the price at expiry is above the strike price, the call will be exercised, while if it is below, the put will be exercised, and thus, in either case, one unit of the asset will be purchased for the strike price, exactly as in a forward contract.

Click the video below (from Khan Academy) to learn more:

about the author:

Mike Shorr

Since 1994, Michael has been an on-the-floor market maker, Vice-President of Interest Rate Derivatives for Knight Financial Products and Director of Education and Options Instructor at Trading Advantage. He makes the oftentimes complex world of options and trading accessible to the novice and advanced trader alike. Michael has a Bachelor of Science degree in Statistics and Finance from the University of Illinois Champaign-Urbana. He presently is Director, Trader Education at ProsperTradingAcademy.

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May 27, 2020

What is a Collar Option Spread?

A collar option spread is another example of a spread that you won’t see a signal coming out of either of our options rooms. Not because it is too risky or a bad idea, but it necessitates holding an underlying stock position. But it’s important to know what it is and you may get to […]

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May 27, 2020

What Does the “Reopening” of the US Mean for Energy?

Even if you don’t watch financial news, you have to know that gas prices are probably somewhere around when you were let’s just say quite a bit younger. Click the video below to see how Scott explains his take on the energy market Follow him on Twitter  @CboeSib    

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May 27, 2020

Congestion At Target?

The Congestion Entry is not necessarily the most popular methodology we employ in the short-term option room but it is a very powerful and reliable one. Click the video below to see how we employed it in Target ($TGT) this morning. Grab a free day pass to one of our live signal trading rooms today>> […]

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May 27, 2020

What is a Collar Option Spread?

A collar option spread is another example of a spread that you won’t see a signal coming out of either of our options rooms. Not because it is too risky or a bad idea, but it necessitates holding an underlying stock position. But it’s important to know what it is and you may get to […]

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May 27, 2020

What Does the “Reopening” of the US Mean for Energy?

Even if you don’t watch financial news, you have to know that gas prices are probably somewhere around when you were let’s just say quite a bit younger. Click the video below to see how Scott explains his take on the energy market Follow him on Twitter  @CboeSib    

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May 27, 2020

Congestion At Target?

The Congestion Entry is not necessarily the most popular methodology we employ in the short-term option room but it is a very powerful and reliable one. Click the video below to see how we employed it in Target ($TGT) this morning. Grab a free day pass to one of our live signal trading rooms today>> […]

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