Video Library

Put/ Call Parity

One of the most intriguing and crucial relationships that exists in the options market is how the prices of stocks, calls, and puts relate to one another. This dynamic is known as Put/ Call Parity and understanding this relationship can lead to a deeper understanding of options prices.

Theoretical Option Pricing

This webinar takes the topic of options pricing to the next level. It discusses the Black-Scholes and Cox-Ross-Rubenstein pricing models and how an investor can utilize the OIC Options Calculator as a resource. It also touches on the put-call parity and understanding volatility skew.

(7:32) - Option Pricing Models
(12:00) - Black-Scholes Model
(15:24) - OIC Options Calculator
(19:40) - Put Call Parity
(22:37) - Arbitrage
(27:55) - Synthetics
(28:30) - Reverse Conversion
(40:38) - Volatility Skew
 

How Interest Rates and Dividends Shift Parity

Real examples showing how changing interest rate assumptions (4.32% vs 8.32%) create different forward prices even with identical strikes and stock prices. See how dividend timing affects call and put pricing.

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Creating Synthetic Stock Positions

How to replicate stock positions using options. See how long calls plus short puts create synthetic long stock, and short calls plus long puts create synthetic short stock—with the same P&L profiles.

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Put-Call Parity Explained

The market force that keeps calls and puts on the same strike in equilibrium. Learn the formula and why understanding parity helps you identify discount factors like interest rates, dividends, and hard-to-borrow costs.

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Black-Scholes vs. Cox-Ross-Rubinstein Models

The two main pricing models used in listed options. Discover the key differences and why this matters for different types of options.

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