Put-Call Parity Calculator
Find Call Price
Calculate theoretical call price from put price
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Find Put Price
Calculate theoretical put price from call price
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Check Parity
Verify if put-call parity holds
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Formula
C + PV(K) = P + S | C + K*e^(-rT) = P + S
Frequently Asked Questions
What is put-call parity?
Put-call parity is a fundamental relationship between the price of a European call option and a European put option with the same strike price and expiration date: C + PV(K) = P + S, where C is call price, P is put price, S is stock price, and PV(K) is the present value of the strike.
What happens when parity is violated?
When put-call parity is violated, an arbitrage opportunity exists. Traders can construct a riskless portfolio to lock in a profit by simultaneously buying the underpriced side and selling the overpriced side.
Does put-call parity work for American options?
Put-call parity strictly applies to European options. For American options on non-dividend-paying stocks, the relationship becomes an inequality: S - K <= C - P <= S - PV(K).
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