The stock put option is negatively related to risk free rates; while the stock call option is positively related to risk free rates.
Can someone explain why? Thanks!
The stock put option is negatively related to risk free rates; while the stock call option is positively related to risk free rates.
Can someone explain why? Thanks!
See put call parity and adjust: C + K/(1+rf)^t = P + S C= p+s- k/(1+r)^t Higher the value of r higher is C. Opposite for puts