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A European call and a European put option have the same underlying stock, strike price, maturity date and premium. What can you say about this situation?

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Answer #1

Listen let me first tell you what is a call option or put option

Incall option, we bid that price of this share will go up. So we either purchase or sell the stock. In this case, strike price is usually above the share price.

In the Put option, we bid that price go down. So we either purchase P+, or we sell P-. The strike price may be above the current price or lower than the current cost.

In the above example, both options have the same stock, strike price, maturity, and premium. That means the strike of both is either above the price or lower than the price but equal for both.

The strike price, maturity, and stock can be the same, but premiums cant is the same.

So the right answer is not possible.



answered by: gavin
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