Call Parity

Put/Call Parity

Identified by Hans Stoll in 1969, the Put/Call Parity refers to the idea of an efficient market. What he defined was that the relationship between European puts and calls with the same expiration and strike price must have the same value combined as the asset itself, or arbitrage exists. This is because holding identical expiration and strike price put/calls is the same as holding the asset (stock, bond, commodity) itself.

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Part of Speech: proper noun
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Blossary: Call and Put option
Industry/Domain: Financial services
Category: Stocks & securities
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