when an investor purchases a stock option the owner has the right to buy a fixed number of stock shares at a stated price and the right to buy the shares expires on a fixed date one 50 microsoft call option for example means that the owner can buy 100 shares of microsoft common stock at 50 per share before the option expires if the market price of microsoft is 60 per share the intrinsic value of the option is 60 50 or 10 per share if the price of the stock option is also 10 the option trade is at parity 
parity is also used in options in the context of put call parity this describes the relationship that exists between put and call options that have the same underlying asset expiration date and strike prices whereby the price of a call option implies a certain fair price for the corresponding put option with the same strike price and expiration and vice versa you can determine the put call party by using the formula c pv x p s