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The P behind Q: Empirical Evidence from Physical Drift in Put-Call Parity

q-fin.GN · 2026-05-12 · unverdicted · novelty 5.0 · 4 refs

Empirical study of index-option carry gaps finds that a fitted physical-drift term in a GBM improves the description of put-call parity wedges, interpreted as evidence that physical measures affect the capital-using arbitrage process.

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