Put-call parity relationship

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 underlying 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).
References in periodicals archive ?
The box spread is also a simple algebraic combination of the put-call parity relationship for each option.