Put-Call Parity Calculator FAQ
What is the put-call parity calculator used for?
It solves the European put-call parity relationship when one value is missing. You can use it to infer a call price, put price, strike, or stock price from the other inputs and check whether a quote set is internally consistent.
What is put-call parity?
For European options on a non-dividend-paying stock, put-call parity is C - P = S_0 - K e^{-rT}. Rearranging that identity lets you solve for any one missing variable when the others are known.
Why does the calculator show an error instead of a negative option value?
A standard European call or put value should not be negative. If the implied result comes out below zero, the entered combination violates no-arbitrage logic, so the calculator treats the input set as invalid rather than displaying an impossible option price.
Does put-call parity work for American options?
Not in the same exact equality form. The clean parity identity used here is for European options. American options can be exercised early, so they are typically described by bounds or inequalities instead of the exact equation used on this page.
How should I enter time to maturity?
You can enter time in days, months, or years. The calculator converts the selected unit to years internally before discounting the strike value.
What does the parity difference mean?
The parity difference is (C - P) - (S_0 - K e^{-rT}). For a perfectly consistent European option input set, that value should be 0 apart from rounding. A non-zero result means the quoted values do not line up with exact parity.
Can this calculator detect arbitrage opportunities?
It can help you spot parity inconsistencies, which may suggest a mispricing. In real markets, however, transaction costs, bid-ask spreads, funding assumptions, dividends, and exercise style all matter before treating a small difference as a usable arbitrage trade.
