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Law of one price

An 

Economic

 rule which states that in an efficient 

Market

, a security must have a 

Single

 price, no matter how that security is created. For example, if an 

Option

 can be created using two different sets of underlying securities, then the total price for each would be the same or else an 

Arbitrage

 opportunity would exist.



Related Terms: 11

ACH

,

Arbitrage

,

ECU

,

Economic

,

Market

,

Option

,

PPO

,

Rent

,

SEC

,

Single

,

Unit


Other Related Pages:

Category: Stocks


Starting With: L


Semi Related Terms: 620  CLICK HERE TO VIEW

10-K

,

30-day wash rule

,

Allowance for depreciation

,

Annuity unit

,

ACH

,

Accrual of discount

,

Accrued market discount

,

Agency security

,

Amortization of premium

,

Asked price

,

Asking price

,

Asset-backed security

,

At par

,

All or any part

,

At best

,

At call

,

Adjusted futures price

,

At risk

,

Add-on service

,

Abstract of title

,

Action to quiet title

,

As is

,

Assignment to creditors

,

Attorney in fact

,

Assignment of mortgage

,

A shares

,

Assets under management

,

Average price per share

,

Aggregate exercise price

,

American option

,

American-style option

,

Asian option

,

At the money

,

Average option

,

Accumulation unit

,

Age-weighted plan

,

Across the board

,

Additional paid-in capital

,

Arbitrage

,

Arbitrage house

,

Arbitrage Pricing Theory

,

Active market

,

Against the box

,

At the bell

,

At the close

,

At the figure

,

At the full

,

At the market

,

At the opening order

,

Auction market

,

Away from the market

,

Below the line

,

Books of final entry

,

Books of original entry

,

Banking Act of 1933

,

Bid-to-cover ratio

,

Bond market

,

Book-entry security

,

Bureau of Public Debt

,

Brought over the wall

,

Buying on margin

,

Buy on close

,

Buy on opening

,

Buy the book

,

Balance of payments

,

Bear market

,

Board of Governors

,

Bulldog market

,

Breaking the syndicate

,

Bill of exchange

,

Bill of sale

,

Breach of trust

,

By the book

,

B shares

,

Breadth-of-market theory

,

Beat the gun

,

Bull market

,

Cost Of Goods Sold

,

Cost of sales

,

Cabinet security

,

Call price

,

Capital market

,

Certificate of Participation

,

Committee on Uniform Securities Identification Procedures

,

Conversion option

,

Conversion parity price

,

Conversion price

,

Convertible security

,

Current market value

,

Code of procedure

,

Customer protection rule

,

Covered arbitrage

,

Capitalization of income

,

Consumer Price Index

,

Cost of Living Adjustment

,

Cost-of-living index

,

Council of Economic Advisers

,

Cash market

,

Cash price

,

Chasing the market

,

Cheapest to deliver

,

Chicago Board of Trade

,

Contract market

,

Cost-of-living rider

,

Certificate of stock

,

Cost of carry

,

Certificate of title

,

Contract for deed

,

Cancellation of debt

,

Certificate of Claim

,

Cost of debt capital

,

Cost of funds

,

C shares

,

Call option

,

Class of options

,

Close to the money

,

Conversion arbitrage

,

Covered option

,

Certificate of Occupancy

,

Cloud on title

,

Cash or Deferred Arrangement

,

Choice market

,

Class A Shares

,

Class B Shares

,

Convertible arbitrage

,

Crash of 1929

,

Crash of 1987

,

Compound arbitrage

,

Coefficient of determination

,

Certificate of delivery

,

Close a position

,

Close market

,

Closing price

,

Continuous market

,

Cornering the market

,

Curbs in

,

Deposit in transit

,

Date of issue

,

Date of payment

,

Dealer market

,

Debt market

,

Digested security

,

Dollar price

,

Drawn securities

,

Droplock security

,

Division of Enforcement

,

Division of Investment Management

,

Division of Market Regulation

,

Date of record

,

Dividend in arrears

,

Desk (the)

,

Division of labor

,

Delivery price

,

Derivative security

,

De-escalation clause

,

De facto

,

Durable Power of Attorney

,

Date of maturity

,

Debtor in possession

,

Debtor-in-possession financing

,

Deed of Release

,

Deed of Trust

,

Discharge of bankruptcy

,

Discharge of lien

,

Due-on-sale clause

,

Deep in the money

,

Deep out of the money

,

Deed of Surrender

,

Department of Housing and Urban Development

,

Distressed security

,

Dogs of the Dow

,

Deep market

,

Depth of market

,

Double auction market

,

Economic surplus

,

Economic value

,

Eurodollar certificate of deposit

,

Embedded option

,

Escrowed to maturity

,

Exchangeable security

,

Exempt security

,

Ex-legal

,

External market

,

Either-or order

,

ECU

,

European Currency Unit

,

Economic

,

Economic cycle

,

Economic growth

,

Economic growth rate

,

Economic indicator

,

Economic sanctions

,

E-mini

,

Exchange for futures

,

Exchange for physical

,

Exchange of spot

,

Ex-pit transaction

,

Emerging market

,

Equity option

,

Ex-all

,

European-style option

,

Exchange-traded option

,

Ex-warrants

,

Economic rent

,

Employee Retirement Income Security Act of 1974

,

Ex-rights

,

Ex-rights date

,

Efficient frontier

,

Efficient portfolio

,

First In First Out

,

Fixed-income arbitrage

,

Flight to quality

,

Flow of funds

,

Full price

,

Fill or kill

,

Front-ending an order

,

Foreign currency option

,

Forward P/E

,

Factors of production

,

Favorable balance of trade

,

Free market

,

Free market price

,

Forward price

,

Futures option

,

Futures price

,

Fee-for-service

,

Fair market value

,

Form 8-K

,

Form S-1

,

Floating security

,

Family of funds

,

Fund of funds

,

Far option

,

Free right of exchange

,

Fourth market

,

Government securities

,

Government Securities Clearing Corporation

,

Graduated security

,

General Securities Representative Examination

,

G-7

,

GDP implicit price deflator

,

General Agreement on Tariffs and Trade

,

G-8

,

Gather in the stops

,

Graveyard market

,

Hart-Scott-Rodino Act of 1976

,

Hit the bid

,

House of issue

,

Holder in due course

,

Home equity line of credit

,

Housing Market Index

,

Hammering the market

,

Held at the opening

,

Holding the market

,

Horizontal price movement

,

In escrow

,

Inflation-indexed security

,

International Securities Identification Number

,

Investment security

,

In-house

,

Investment Advisor Act of 1940

,

Investment Company Act of 1940

,

In line

,

Inefficient market

,

Inverted market

,

Internal market

,

Inside market

,

Insider Trading sanctions Act of 1984

,

Internal Rate of Return

,

Indication of interest

,

In intestacy

,

In play

,

In-process research and development

,

Index option

,

Interest rate option

,

I/O strip

,

In-service withdrawal

,

Index arbitrage

,

Income exclusion rule

,

Imbalance of orders

,

Imperfect market

,

In and out

,

In sympathy

,

In the tank

,

Jumping the gun

,

Knock-out option

,

Last In First Out

,

Lender of last resort

,

Law of one price

,

Letter security

,

Lending at a rate

,

Limit-on-close order

,

Limit price

,

Long Market Value

,

Law of demand

,

Law of supply

,

Long-Term Equity Anticipation Securities

,

Letter of comment

,

Legal age

,

Line of credit

,

Loan-to-cost

,

Loan-to-value

,

Lock-in

,

Lapsed option

,

Listed option

,

Leading the market

,

Locked in

,

Long-term gain or loss

,

Level I quotes

,

Liquid market

,

Locked market

,

Marketable security

,

Market basket

,

Market capitalization

,

Market conversion price

,

Mortgage-backed security

,

Mortgage pass-through security

,

Make a market

,

Market if touched order

,

Market letter

,

Market maker

,

Market maker spread

,

Market on close order

,

Market order

,

Mark-to-market

,

Medium of exchange

,

Marginal propensity to consume

,

Market economy

,

Market rate

,

Money at call

,

Marketable securities

,

Market cap

,

Market neutral

,

Market portfolio

,

Market timer

,

Market timing

,

Market analysis

,

Market

,

Market inefficiency

,

Market opening

,

Market return

,

Market-share weighted index

,

Market surveillance

,

Market-value weighted index

,

Market Volatility Index

,

Maximum price fluctuation

,

Mixed market

,

Negotiable certificate of deposit

,

Negotiable Order of Withdrawal

,

National Market System

,

Negotiable security

,

Nine-Bond Rule

,

Notice of Sale

,

National Association of Securities Dealers

,

National Association of Securities Dealers Automated Quotations system

,

National Securities Clearing Corporation

,

National Securities Trade Association

,

No limit order

,

No quote

,

Non-equity option

,

Normal market

,

No-Fault

,

No-Action Letter

,

No-lien affidavit

,

Notice of Default

,

No-load

,

Naked option

,

Near option

,

Non-qualified stock option

,

Non-statutory stock option

,

National Association of Real Estate Investment Trusts

,

Normal retirement age

,

Nasdaq Small Cap Market

,

No-load stock

,

Narrow market

,

National Market Advisory Board

,

Negotiated market

,

No book

,

Off the books

,

Office of Thrift Supervision

,

Offering price

,

Out-of-favor

,

Over-the-Counter

,

On-floor order

,

On margin

,

Option account

,

Or better

,

Open market operation

,

One-share one-vote rule

,

Option

,

Opinion of title

,

On account

,

On-the-spot loan

,

Option income fund

,

Option chain

,

Option contract

,

Option holder

,

Option margin

,

Option pool

,

Option premium

,

Option price

,

Option pricing curve

,

Option series

,

Option spread

,

Option writer

,

Out of the money

,

Old age, survivors, and disability insurance

,

On-balance volume

,

On close

,

On open

,

On the opening

,

Open market

,

Operationally efficient market

,

Option exchange

,

Outside market

,

Pooling of interests

,

Payment-in-kind security

,

Price Value of a Basis Point

,

Payment for order flow

,

Public Securities Association

,

P&L

,

Provision for income taxes

,

Price index

,

Producer Price Index

,

Parity price

,

Physical market

,

Price limit

,

PPO

,

Primary market

,

Public offering price

,

Power of Attorney

,

Prioritization of debt

,

Private Market Value

,

Physical option

,

Price spread

,

Put option

,

Paid-in capital

,

Paid-in surplus

,

Private Investment in Public Equity

,

Perfect capital market

,

Preservation of capital

,

Painting the tape

,

Plus tick rule

,

Price range

,

Price-weighted index

,

Return of capital

,

Return on Capital

,

Return on Invested Capital

,

Return on Total Assets

,

Redemption price

,

Registered security

,

Residual security

,

Restricted security

,

Reading the tape

,

Regulation D

,

Regulation G

,

Regulation T

,

Regulation U

,

Round of funding

,

Rule 10b-6

,

Rule 15c3-1

,

Rule 19c3

,

Rule 405

,

Rule 415

,

Rules of Fair Practice

,

Rate of exchange

,

Reciprocal of European terms

,

Real economic growth rate

,

Retail Price Index

,

Regulation A

,

Right of first refusal

,

Right of rescission

,

Right to Know

,

Revolving line of credit

,

Right of recourse

,

Rule of 78

,

Reversal arbitrage

,

Rent

,

Rent control

,

Right of redemption

,

Retirement Equity Act of 1984

,

Risk arbitrage

,

Riskless arbitrage

,

Return on Capital Employed

,

Rate of return

,

Real rate of return

,

Rule 13d

,

SEC filing

,

SG&A

,

Single-entry bookkeeping

,

Sight letter of credit

,

S&L

,

State bank

,

SEC

,

Secondary market

,

Securities and Exchange Commission

,

Stamped security

,

SEC fee

,

Securities analyst

,

Securities Industry Association

,

Securities Investor Protection Corporation

,

Securities loan

,

Segregation of securities

,

Sell the book

,

Specialist unit

,

Stop price

,

Same-store sales

,

Standard of living

,

Settlement price

,

Single stock futures

,

Spot market

,

Spot price

,

Second-to-die insurance

,

Single-premium life insurance

,

Stock market

,

Stock option

,

Stock option plan

,

Subscription price

,

Statute of Limitations

,

Satisfaction of debt

,

Secondary mortgage market

,

Securities lending

,

Security interest

,

Security loan

,

Senior security

,

Single-payment loan

,

Staggered board of directors

,

Selling the spread

,

Short market value

,

Single option

,

Spread option

,

Savings Incentive Match Plan for Employees

,

Single-employer plan

,

Single-life annuity

,

Single-Premium Deferred Annuity

,

Social Security

,

Social Security Tax

,

Share price

,

Split-adjusted price

,

Security analysis

,

Selling short against the box

,

Shorting against the box

,

Short sale rule

,

S Corporation

,

Short-term gain or loss

,

Single

,

Sin tax

,

Subchapter M

,

Subchapter S Corporation

,

Same Day Funds Settlement

,

Schedule C

,

Securities Act of 1933

,

Securities Acts Amendments of 1975

,

Securities Exchange Act of 1934

,

Securities fraud

,

Seek a market

,

Specialist market

,

S&P phenomenon

,

Total assets

,

Total cost

,

T-Bill

,

Term to maturity

,

Treasury Inflation-Protected Security

,

Trust-preferred security

,

Take a position

,

Two-sided market

,

Two-way market

,

Total return

,

Trailing P/E

,

Total asset turnover

,

Total return index

,

Tenancy by the entirety

,

TED spread

,

Truth in Lending

,

Two-step mortgage

,

Tenancy at will

,

Top hat plan

,

The Street

,

Timing the market

,

Tax-efficient

,

Taxpayer Relief Act of 1997

,

Tax Reform Act of 1986

,

Tax Reform Act of 1993

,

Take a bath

,

Target price

,

Thin market

,

Third market

,

Tight market

,

Transparent market

,

U.S. Government Agency Security

,

U.S. Savings Bond

,

U.S. Treasury

,

U.S. Treasury Bill

,

U.S. Treasury Bond

,

U.S. Treasury Note

,

U.S. Treasury Securities

,

Underlying debt

,

Unit

,

Uniform Securities Act

,

Underlying security

,

Uncovered option

,

Unit Investment Trust

,

Unit Trust

,

Unit of trade

,

Unit of trading

,

Wage price spiral

,

Waiver of premium

,

W-2 Form

,

Wash sale rule

,

W formation

,

Weak market

,

When, as, and if issued

,

Wide market

,

X or XD

,

Year-To-Date

,

Yankee bond market

,

Yield to call

,

Yield to maturity

,

Yield to worst

,

Y shares


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