Option Call and Option Put Call and Put Option- Put option or put call parity trick.<\/p>\n
[fvplayer id=”567″]<\/p>\n
Options trading involves Call Options<\/strong> and Put Options<\/strong>, which allow traders to bet on the rise or fall of an asset<\/strong>.<\/p>\n A Call Option<\/strong> gives the buyer the right (but not the obligation)<\/strong> to buy an asset at a fixed price before expiry.<\/p>\n Example:<\/strong><\/p>\n A Put Option<\/strong> gives the buyer the right to sell<\/strong> an asset at a fixed price before expiry.<\/p>\n Example:<\/strong><\/p>\n Put-Call Parity is a concept that helps in arbitrage trading and pricing options correctly<\/strong>.<\/p>\n Formula:<\/strong> OR<\/p>\n Call Option + Cash = Put Option + Stock<\/strong><\/p>\n This means:<\/p>\n Put-Call Parity Arbitrage Trick<\/strong>:<\/p>\n If Call is expensive<\/strong> \u2192 Sell Call & Buy Put of the same strike. This helps in identifying mispriced options<\/strong> and making quick profits using arbitrage strategies.<\/p>\n Would you like me to show a live example or practical strategy<\/strong> based on the current market?<\/p>\n Here\u2019s a clear breakdown of Call Option<\/strong>, Put Option<\/strong>, and the Put-Call Parity Trick<\/strong>, simplified for easy understanding:<\/p>\n A Call Option<\/strong> gives the buyer<\/strong> the right (but not the obligation)<\/strong> to buy<\/strong> an asset (e.g., stock) at a fixed price (called the strike price<\/strong>) before a certain date.<\/p>\n You think the price will go up<\/strong>.<\/p>\n A Put Option<\/strong> gives the buyer<\/strong> the right (but not the obligation)<\/strong> to sell<\/strong> an asset at a fixed strike price before a certain date.<\/p>\n You think the price will go down<\/strong>.<\/p>\n Put-Call Parity connects the price of calls and puts on the same stock, with the same strike and expiry.<\/p>\n Call\u00a0Price\u2212Put\u00a0Price=Spot\u00a0Price\u2212Strike\u00a0Price\u00d7e\u2212rT\\text{Call Price} – \\text{Put Price} = \\text{Spot Price} – \\text{Strike Price} \\times e^{-rT}<\/span>Call\u00a0Price<\/span><\/span>\u2212<\/span><\/span>Put\u00a0Price<\/span><\/span>=<\/span><\/span>Spot\u00a0Price<\/span><\/span>\u2212<\/span><\/span>Strike\u00a0Price<\/span><\/span>\u00d7<\/span><\/span>e<\/span>\u2212r<\/span>T<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n If you hold:<\/p>\n 1 Long Call<\/strong><\/p>\n<\/li>\n 1 Short Put<\/strong> OR<\/p>\n Call+PV\u00a0of\u00a0Strike=Put+Spot\\text{Call} + \\text{PV of Strike} = \\text{Put} + \\text{Spot}<\/span>Call<\/span><\/span>+<\/span><\/span>PV\u00a0of\u00a0Strike<\/span><\/span>=<\/span><\/span>Put<\/span><\/span>+<\/span><\/span>Spot<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Where:<\/p>\n PV = Present Value<\/p>\n<\/li>\n r = Risk-free rate<\/p>\n<\/li>\n T = Time to maturity<\/p>\n<\/li>\n<\/ul>\n \u201cCall + Bond = Put + Stock\u201d<\/strong><\/p>\n This means:<\/p>\n If you buy a Call<\/strong> and a bond<\/strong> (which pays the strike), it gives the same return as buying a Put<\/strong> and the stock<\/strong>.<\/p>\n<\/li>\n<\/ul>\n Put-Call Parity helps you:<\/p>\n Spot arbitrage opportunities<\/strong><\/p>\n<\/li>\n Check if options are overpriced or underpriced<\/strong><\/p>\n<\/li>\n Build synthetic positions<\/strong> (e.g., synthetic long stock)<\/p>\n<\/li>\n<\/ul>\n Let me know if you\u2019d like a payoff diagram<\/span>, real-life example with numbers<\/span>, or a visual cheat sheet<\/span> to memorize these quickly.<\/p>\n Option Call and Option Put Call and Put Option- Put option or put call parity trick. [fvplayer id=”567″] Options Trading Basics: Call & Put Options Options trading involves Call Options and Put Options, which allow traders to bet on the rise or fall of an asset. 1. What is a Call Option? A Call Option […]<\/p>\n","protected":false},"author":64,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":["post-4017","post","type-post","status-publish","format-standard","hentry","category-stock-market"],"_links":{"self":[{"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/posts\/4017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/comments?post=4017"}],"version-history":[{"count":0,"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/posts\/4017\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/media?parent=4017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/categories?post=4017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.reilsolar.com\/pdf\/wp-json\/wp\/v2\/tags?post=4017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}1. What is a Call Option?<\/strong><\/h3>\n
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2. What is a Put Option?<\/strong><\/h3>\n
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3. Put-Call Parity (Trick for Understanding Relationship)<\/strong><\/h3>\n
Call Price \u2013 Put Price = Spot Price \u2013 Strike Price + Risk-Free Interest<\/strong><\/p>\n\n
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4. Simple Trick to Trade Using Put-Call Parity<\/strong><\/h3>\n
If Put is expensive<\/strong> \u2192 Sell Put & Buy Call of the same strike.<\/p>\n
\n\ud83d\udcc8 1. What is a Call Option?<\/strong><\/h2>\n
\ud83d\udd39 You buy a Call when:<\/h3>\n
\n\ud83d\udcc9 2. What is a Put Option?<\/strong><\/h2>\n
\ud83d\udd39 You buy a Put when:<\/h3>\n
\n\ud83d\udd01 3. Put-Call Parity \u2013 Formula & Trick<\/strong><\/h2>\n
\ud83d\udca1 Formula<\/strong>:<\/h3>\n
\ud83d\udca1 Simplified Trick (for no-arbitrage condition)<\/strong>:<\/h3>\n
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\nYou replicate a Forward Contract<\/strong> (same payoff).<\/p>\n<\/li>\n<\/ul>\n\n
\n\ud83e\udde0 Easy Memory Trick:<\/strong><\/h2>\n
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\n\ud83d\udcca Use in Trading:<\/h2>\n
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\nOption Call and Option Put Call and Put Option- Put option or put call parity trick.<\/a><\/h3>\n
Introduction to Options Markets and Behaviors<\/a><\/h3>\n
Options Theory for Professional Trading<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"