A portfolio containing a share of stock and a put option will have the same value as a portfolio containing a call option and the risk-free discount bond.

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This statement is known as put-call parity and is a fundamental principle in options pricing. It states that the value of a portfolio containing a long position in a stock and a put option with the same strike price and expiration date is equivalent to a portfolio containing a long position in a call option with the same strike price and expiration date, and a risk-free discount bond. Therefore, options traders use put-call parity to find and exploit mispricings in the options market.

A Portfolio Containing a Share of Stock and a Put