PutCall Parity
Tags: #Financial #EconomicsEquation
$$c(S_{t}, K, t, T)  p(S_{t}, K, t, T) = F^{P}_{t,T}(S)  Ke^{r(Tt)}$$Latex Code
c(S_{t}, K, t, T)  p(S_{t}, K, t, T) = F^{P}_{t,T}(S)  Ke^{r(Tt)}
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Introduction
Equation
Latex Code
c(S_{t}, K, t, T)  p(S_{t}, K, t, T) = F^{P}_{t,T}(S)  Ke^{r(Tt)}
Explanation
Latex code for the Forwards Contracts. I will briefly introduce the notations in this formulation. Call options give the owner the right, but not the obligation, to buy an asset at some time in the future for a predetermined strike price. Put options give the owner the right to sell. The price of calls and puts is compared in the following putcall parity formula for European options.
 : Price of call option c
 : Price of put option p
 : the present value of the strike price (x),
 :
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