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OptionsMath

Put-Call Parity Calculator

Put-call parity says call minus put equals discounted stock minus discounted strike, adjusted for dividends and rates.

Expiration scenarios

Solution

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Educational estimate only, not financial advice. Results exclude commissions, taxes, slippage, dividends, assignment risk, margin, and broker-specific rules. Verify before trading options.

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Put-Call Parity Formula

The calculator compares the market call-put difference with the theoretical parity value.

Worked Examples

Load these examples to compare common put-call parity payoff outcomes.

PARITY CHECK

Compare call-put spread with parity

A trader checks whether a same-strike call and put imply fair synthetic stock pricing.

  • Enter the manual prices and assumptions.
  • Review the calculated risk, reward, and break-even metrics.
  • Compare the chart with the highlighted scenario.

Result: the calculator updates the scenario metrics and chart from those inputs.

Real fills, fees, and broker margin rules are not modeled.

How It Works

Put-call parity compares the price of a call, put, stock, and discounted strike for the same expiration and strike.

Example Problem

Enter the stock price, strike, call, put, days, rates, and dividend yield.

  1. Discount the stock and strike inputs.
  2. Compare call minus put with discounted stock minus discounted strike.
  3. Calculate fair call and put values.
  4. Review the conversion or reversal gap.

Real arbitrage depends on borrow, dividends, exercise style, fees, bid/ask spreads, and execution.

Key Concepts

Parity is the pricing relationship behind conversions, reversals, and synthetic stock.

Applications

  • Checking synthetic stock pricing.
  • Comparing call and put relative value.
  • Learning conversion/reversal mechanics.

Common Mistakes

  • Ignoring dividends and rates.
  • Mixing expirations or strikes.
  • Treating a theoretical gap as tradable after costs.

Frequently Asked Questions

What does the Put-Call Parity Calculator calculate?

It calculates the selected options result from manual inputs, without requiring live stock or option quotes.

Does this calculator need live market data?

No. Enter the prices, premiums, volatility, days, or Greeks yourself. The calculator uses those manual inputs only.

Are commissions, taxes, margin interest, and assignment fees included?

No. The result excludes commissions, fees, taxes, borrow costs, slippage, and broker-specific margin rules.

Why can real trading results differ?

Real option prices can change with implied volatility, liquidity, dividends, early assignment, and execution prices.

Reference: Options Industry Council put-call parity and synthetic position education.

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