Put-call parity: why calls and puts are tied together
Use put-call parity to see why call and put prices cannot drift apart freely.
Module 11 of 26, Options: how they pay and what moves them. Lesson 6 of 6, about 16 minutes.
The takeaway
Call and put prices at the same strike are chained by arbitrage; their difference equals the cost of the stock now minus the cost of paying the strike later.
This page is a public summary. The full lesson has the worked examples, an interactive exercise and a short quiz, and sits in the course. Lessons 1 and 2 of Module 1 are free and the rest need a pass.
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