Put-call parity

Definition:

Applies to derivative products. Option pricing principle that says, given a stock's price, a put and call of the same class must have a static price relationship because arbitrage opportunities or activities will always reestablish such a relationship.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Presidential election cycle theory

A theory that stock market trends can be predicted and explained by the four-year presidential election cycle.

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