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Futures Option
> Put Call Parity, Intrinsic Value



About Put Call Parity and Intrinsic Value

Another important concept is the Intrinsic Value of the option.
The Intrinsic Value is used to describe the current value in terms
of the number of points an option is in the money -- the difference between
the stock and strike price. (see in the money )

When an option is expired and with no time value remaining it
is said to be in parity.
(see at the money )

Typically, a profit graph is employed to help visualize potential scenarios, projecting results at differenet times and at expiration.
The profit zone or profit range is the range in which a profit may be
made, based on break-even points (represented as an upward region
for the Call buyer and a downward region for the buyer of the Put)




 
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