what does the law of one price mean in finance 
in financial markets the law of one price states that two equivalent securities should have the same value even if they were created under different circumstances in other words a synthetic security should have the same market price as a physical security with the same payoffs if this were not the case an arbitrage opportunity would present itself that could be exploited by savvy traders 2the bottom linethe law of one price is an economic principle that equivalent goods should command the same prices in different markets provided that there are no significant transaction costs or trade barriers in practice differences in market structure and demand often cause variations in price across geographies 