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标题: Options - underpriced/overpriced puts [打印本页]

作者: anothercfainnyc    时间: 2011-7-13 17:02     标题: Options - underpriced/overpriced puts

Put underpriced
- buy put
- buy stock

Put overpriced
- sell put
- sell stock

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

thank you...




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