Question: Mr Kent one of your clients has been reading his
Mr. Kent, one of your clients, has been reading his daughter’s finance textbook and has a question about options. He says: “If I buy a call option, I have the right to buy the asset at the strike price. If I buy a put option, I have the right to sell the asset at the strike price. And if I sell a put, I have to buy the asset at the strike price. Therefore, buying a call option is the same as selling a put. So if I observe that puts and calls have different prices, I can make money because they should have the same price!” Comment on Mr. Kent’s statement. Is he correct?
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