An equation that expresses the parity of a portfolio of a call option and a bond with a portfolio of a put option and the underlying. This equation helps explain the relationship between put and call prices.
Derived from the relationship: Protective put = Fiduciary call
S0 + p0 = c0 + X/(1+rf)T
S0: Long underlying at its spot price
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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