Relation between the price of vanilla options with the same strike price and expiry.

Applies to derivative products. Option pricing principle that says, given a stock's price, a put and call of the same class must have a static price relationship because arbitrage opportunities or activities will always reestablish such a relationship.

This is the relationship which exists between calls and puts (of particular importance with regard to arbitrage trades). It states that the value of a call (put) can be derived from the value of a put (call) with the same exercise price, maturity date and underlying price. C= P+F-X (where: C= call price, P= put price, F= futures price, X= exercise price).