Put-call parity: related pages

An option which can be exercised at the strike price at anytime before the expiry date.

The most widely used method of option valuation. More complex models are sometimes necessary as it uses a number of simplifying assumptions.

The difference between the intrinsic value of an option and its actual value is called the option value.

The amount of money an option would make by exercising it immediately; the price difference between the strike price and the price of the underlying.

A hedge that does not require constant monitoring and re-balancing.

A hedge that needs to be adjusted as the price (and sometimes other characteristics) of the portfolio or security it is hedging changes.