What Is the Concept of “Put-Call Parity” and How Does It Apply to European Crypto Options?

Put-call parity is a fundamental relationship that links the price of a European call option, a European put option, the underlying asset's price, and the forward price. It states that a portfolio of a long call and a short put with the same strike and expiration is equivalent to a long forward contract.

This principle holds for European crypto options and is a crucial tool for detecting and exploiting arbitrage opportunities, ensuring consistent pricing across the market.