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Box spread |
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Box spreadA type of option arbitrage in which both a bull spread and a bear spread are established for a near-riskless position. One spread is established using put options and the other is established using calls. The spread may both be debit spreads (call bull spread vs. put bear spread) or both credit spreads (call bear spread vs. put bull spread). Break-Even Point--the stock price (or prices) at which a particular strategy neither makes nor loses money. It generally pertains to the result at the expiration date of the options involved in the strategy. A "dynamic" break-even point is one that changes as time passes.Box spreadA four-sided option spread that involves a long call and a short put at one strike price as well as a short call and a long put at another strike price. Example: buying 1 XYZ May 60 call, and writing 1 XYZ May 65 call; simultaneously buying 1 XYZ May 65 put, and writing 1 May 60 put.Similar MatchesMaturity spreadMaturity spreadThe difference in returns between bonds pfof different time lengths. Ratio Calendar SpreadRatio Calendar SpreadSelling more near-term options than longer-term ones purchased, all with the same strike; either puts or calls. Butterfly spreadButterfly spreadApplies to derivative products. Complex option strategy that involves selling two calls and buying two calls on the same or different markets, with several maturity dates. One of the options has a higher exercise price and the other has a lower exercise price than the other two options. The payoff diagram resembles the shape of a butterfly. Calendar spreadCalendar spreadThe sale (purchase) of a near month call option (put option) and the simultaneous purchase (sale) of a longer dated call option (put option) at the same exercise price. Price spreadPrice spreadAn options strategy that involves buying and selling two options on the same security with the same expiration month, but with different exercise prices. Further SuggestionsCredit spreadBid asked spread bear put spread Yield spread strategies Ratio Spread bear spread Vertical spread Spread Alligator spread bid offer spread bear call spread crack spread ratio spread Perpendicular spread Calendar spread Diagonal spread Underwriting spread Selling the spread Intramarket sector spread spread betting Option spread Intercommodity spread Time spread strategy Spread option credit spread |
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