why do you buy and sell stock above in the two cases?作者: Newhuman 时间: 2011-7-13 17:02
Just remember this:
P +S0 = C + X/(1+r).
This is the put-call parity.
If the left side is < the right side, buy the left side, and sell the right side.
If the left side is > the right side, sell the left side, and buy the right side.
In your example, put under priced: buy the left side, and sell the right side.
In your example, put over priced: sell the left side, and buy the right side..作者: kingstongal 时间: 2011-7-13 17:02