Dictionary
Financial Glossary
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> "Parity" Definition |
 Parity
For convertibles, level at which a convertible securitys market price equals the aggregate value of the underlying common stock; value/worth of the convertible bond considered upon only as an equity instrument. (conversion ratio x common price.) See: conversion value. For international parity, US$ price of a foreign stocks last sale in an overseas market. (local currency stock price x forex rate x A.D.R. ratio). For listed parity, condition whereby no party has floor priority, and matching thus occurs. For options parity, dollar amount by which an option is in-the-money. See: intrinsic value.
A situation in an exchange market where all brokers bidding for the same security have equal standing due to identical bids.
A term used to describe an option contract"s total premium when that premium is the same amount as its intrinsic value. For example, when an option"s theoretical value is equal to its intrinsic value, it is said to be "worth parity." When an option is trading for only its intrinsic value, it is said to be "trading at parity." Parity may be measured against the stock"s last sale, bid, or offer.
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Glossary 
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Parity - For convertibles, level at which a convertible securitys market price equals the aggregate value of the underlying common stock; value/worth of the convertible bond considered upon only as an equity instrument. (conversion ratio x common price.) See: conversion value. For international parity, US$ price of a foreign stocks last sale in an overseas market. (local currency stock price x forex rate x A.D.R. ratio). For listed parity, condition whereby no party has floor priority, and matching thus occurs. For options parity, dollar amount by which an option is in-the-money. See: intrinsic value.
A situation in an exchange market where all brokers bidding for the same security have equal standing due to identical bids.
A term used to describe an option contract"s total premium when that premium is the same amount as its intrinsic value. For example, when an option"s theoretical value is equal to its intrinsic value, it is said to be "worth parity." When an option is trading for only its intrinsic value, it is said to be "trading at parity." Parity may be measured against the stock"s last sale, bid, or offer.
Parity : for convertibles, level at which a convertible securitys market price equals the aggregate value of the underlying common stock; value/worth of the convertible bond considered upon only as an equity instrument. (conversion ratio x common price.) see: conversion value. for international parity, us$ price of a foreign stocks last sale in an overseas market. (local currency stock price x forex rate x a.d.r. ratio). for listed parity, condition whereby no party has floor priority, and matching thus occurs. for options parity, dollar amount by which an option is in-the-money. see: intrinsic value.
a situation in an exchange market where all brokers bidding for the same security have equal standing due to identical bids.
a term used to describe an option contract"s total premium when that premium is the same amount as its intrinsic value. for example, when an option"s theoretical value is equal to its intrinsic value, it is said to be "worth parity." when an option is trading for only its intrinsic value, it is said to be "trading at parity." parity may be measured against the stock"s last sale, bid, or offer.
