Background Note | HBS Case Collection | March 1995 (Revised August 1995)

Options and Put-Call Parity

by Andre F. Perold and Wai Lee

Abstract

Illustrates the payoff structure of various positions involving put and call options and the use of put-call parity in understanding the relationships among various positions. Examines the cases of insured equity, interest rate caps and floors, callable and extendable debt, and corporate balance sheets.

Keywords: Stock Options;

Citation:

Perold, Andre F., and Wai Lee. "Options and Put-Call Parity." Harvard Business School Background Note 295-129, March 1995. (Revised August 1995.)