put-call parity

put-call parity definition - finance
The concept that the prices for a stockÂ’s put or call options with the same expiration date will remain in equilibrium. This occurs because any price discrepancies would be eliminated by arbitrage, which is the practice of taking advantage of minute price differences to make a profit.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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