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For convertibles, level at which a convertible security's market price equals the aggregate value of the underlying common stock; value/worth of the convertible bond considered only as an equity instrument (Conversion ratio times common price). See: Conversion value. For international parity, U.S.$ price of a foreign stock's last sale in an overseas market (Local currency stock price times forex rate times ADR ratio). For listed parity, condition whereby no party has floor priority, and matching thus occurs. For options parity, dollar amount by which an option is in the money. See: Intrinsic value.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


1. The state of being equal. Parity is used in a variety of contexts. For example, parity is achieved when the value of a convertible security equals the value of the underlying common stock.

2. A situation in which the total of the premium and the strike price of an option are equal to the market value of the underlying asset. For example, if the premium is $5 per share and the strike is $10, then parity is achieved when the market value of the underlying is $15 per share. See also: At-the-money.

3. See: Par.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


The state of an option when its premium plus the strike price is equal to the market price of the underlying stock. If stock is selling at $17 per share, an option to buy the stock at $15 would be selling at parity if its premium is $2. See also conversion parity.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
For more information, OTA Insight will be showcasing Parity Insight's newest enhancement at HITEC Minneapolis, from June 18-20 at Booth #1213.
The LET pointed out that the guarantee of vertical parity is not enough to establish parity in the House of People's Representatives (HPR), recalling that the representativeness of women had not exceeded 27% in the elections of the National Constituent Assembly and had not exceeded 30% in the HPR's elections.
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"What makes this a parity violation is that there is no equivalent restriction for providing medical or surgical benefits."
Parity has launched a support website for individuals whose accounts were frozen.
Given that it has only been in the last few years that countries have experimented with negative interest rates as part of an economic stimulus package, very little research has been done on the impact of the negative rates on interest rate parity. The gamut of research focuses on the outcomes of the negative rates on the overall economy.
Department of Labor, ended up citing 44 of the plans reviewed for violations of the federal Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008, according to a new enforcement activities summary.
"Parity sounds simple but it's anything but simple.
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Qian presents readers with a comprehensive examination of risk parity using fundamental, quantitative, and historical analysis to address lingering questions in the theoretical analysis and practical applications of the concept.