In this video Abdulla outlines the concept of Put-Call Parity and how to formulate it into an expression and get all six combinations (long and short positions). He describes the arbitrage-free relationship between call and put premiums for European options. Perhaps most importantly, Abdulla explains how to take advantage of risk-free profit that arises from arbitrage opportunities

Overview

Put–Call parity is an important concept in the option world. The original Black Scholes model priced a European call option on a non-dividend-paying stock. The price of the equivalent put option was derived using the concept of Put-Call Parity.

Key learning objectives:

What is the put-call parity?

How do we calculate the fiduciary call?

What is one of the keys to understanding the Put-Call Parity?

Summary

Expert### Abdulla Javeri

Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.

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