Good explanation. I think that now, I understand what I was saying OK, I've had a nap and it all makes sense... I should probably stop here Given that: Stock + put - carry cost = call (assume no dividend) If we're looking the 180 options with IBM at 100, would it be fair to say that if the call is worth zero since it's so far of the money, the discounting of the put comes from the carry cost? Stock + (put - carry cost) = 0 IOW, the put goes for less than intrinsic and that's essentially what you said about the pricing model having a heart? Or IOW2, if the forward price of IBM is being used and if the call premium is higher than the put premium then if the call premium is zero then the put premium must be less than zero (sort of a negative extrinsic) which means that the put might be 79.19 (as per your 81 cent carry cost example) despite being 80 pts ITM?