In financial mathematics, no-arbitrage bounds are mathematical relationships specifying limits on financial portfolio prices.
[1] The most frequent nontrivial example of no-arbitrage bounds is put–call parity for option prices.
In incomplete markets, the bounds are given by the subhedging and superhedging prices.
[1][2] The essence of no-arbitrage in mathematical finance is excluding the possibility of "making money out of nothing" in the financial market.
This is necessary because the existence of arbitrage is not only unrealistic, but also contradicts the possibility of an economic equilibrium.