It is possible to create a position consisting of Δ shares and 1 call sold, such that the position's value will be identical in the "S up" and "S down" states, and hence known with certainty (see Delta hedging). This certain value corresponds to the forward price above ("An asset with a known future price"), and as above, for no arbitrage to be possible, the present value of the position must be its expected future value discounted at the risk free rate, r. The value of a call is then found by equating the two.