Put-call parity

For European options on a non-dividend-paying underlying with the same exercise price and expiry, C + PV(K) = P + S. Rearranging gives the value of one option type from the other under the model's assumptions. Adjustments are needed for dividends or different contract features; do not apply the simple equation indiscriminately to unmatched or American-style options. The relationship follows from equivalent terminal payoffs, not from a belief that calls and puts have equal premiums. Use a consistent risk-free discounting convention for the exercise amount.