Put–call–forward parity

An equation that explains the no-arbitrage relationship between the pricing of put option, call option, and forward contract of an asset.

Derived from the relationship: Synthetic Protective put = Fiduciary call

F0(T)/(1+rf)T + p0 = c0 + X/(1+rf)T

F0(T)/(1+rf)T: Long forward contract

p0: Long put option

c0: Long call option

X/(1+rf)T: Lend $X at risk-free rate (X: strike price)

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