Derivatives, Am I right?

[archived_user]

Is it correct?
Call

• no cash flows: Pa=Pe
• cash flows: Pa>Pe

Put

• no cash flowsa>Pe
• cash flowsa>Pe

Pa-price of american option Pe- price of european o

 

[archived_user]

Are you asking about lower bounds? Just remember that European option can not be exercised early whilst American can
for Calls Amercian and European C = max(0; S-X/(1+Rf)n) A>=E American is worth al leat as European calls
for Puts European can not be excercise early P= (max0.X/(1+Rf)n)
american P=max(0. X-S) A>E due to immediate execution value is a bit different
R