Difference between revisions of "Fundamental relation between call and put"

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(Created page with "In the picture below you can see a fundamental relation between a call and a put: <html><img src = "/static/files/MBI/Module%2013/fundamentaloptionrelation.png" width="800"...")
 
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In the picture below you can see a fundamental relation between a call and a put:
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Fundamental relation between call and put
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<html><img src = "/static/files/MBI/Module%2013/fundamentaloptionrelation.png" width="800"/></html>
 
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{{{
 
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Buying share + Buying a put = Depositing the prevent value of the exercise price in the bank + Buying a call
 
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In human language this means that:
 
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* Buying a call and saving the money of the exercise price
 
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Is the same as
 
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* Buying a put and buying the share
 
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Other forms of this relationship are:
 
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{{{
 
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Value of the put = Value of the call + Present value of exercise price - share price
 
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}}}
 
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Buying a put is identical to:
 
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* Buy a call
 
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* Invest present value of exercise price in safe asset
 
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* Sell share
 
 
[[Category:finance]]
 
[[Category:finance]]
  

Revision as of 18:38, 27 August 2020

Fundamental relation between call and put