[Verse 1]
When markets fluctuate like restless tides
Two contracts offer different rides
A call gives rights to purchase shares
When prices climb those golden stairs
You pay premium for this ticket
Strike price waits like numbered wicket
[Verse 2]
But puts provide the opposite thrill
Rights to sell when values spill
Downward motion feeds your gain
Protection from the market's strain
Premium paid for safety net
Strike price guards what you might get
[Chorus]
Call plus present value X
Equals put plus stock complex
C plus P-V of strike today
P plus S will match the way
Parity binds these four together
Arbitrage cuts through any weather
[Verse 3]
Payoffs paint the clearest view
Call pays max of zero or two
Stock price minus strike when winning
Put reverses this beginning
Strike minus stock or zero flat
Math reveals where profits sat
[Bridge]
European style equation
Holds this sacred calculation
If the balance tips askew
Traders swoop with something new
Risk-free profit disappears
When equilibrium reappears
[Chorus]
Call plus present value X
Equals put plus stock complex
C plus P-V of strike today
P plus S will match the way
Parity binds these four together
Arbitrage cuts through any weather
[Outro]
Four components locked in place
Options dancing face to face
Present value keeps the time
While parity maintains the rhyme