TeachMeFinance.com - explain Parity
parity -- equality in amount, status or character. In futures trading, it is the situation in which cash and futures contracts are selling at equivalent yields.
Parity -- 1. Equality in amount or value.
Parity -- This word when applied to the price of a stock means a price which is equivalent or equal to the price for the same stock when it is quoted on a different basis. The price in London of an American stock is at parity with the price in New York when the stock is selling in London at a price which, allowing for the difference in method of quoting, is equivalent or equal to the price at which it is selling in New York. In grain there is a normal difference in price between two markets equal to the cost of transporting the grain from the market where the lower price prevails to the market where the higher price prevails. When the difference is normal prices are at parity. It is the same in cotton, etc.
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