Box spread


 

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Box spread

A 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 spread

A 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 Matches

Maturity spread

Maturity spread

The difference in returns between bonds pfof different time lengths.


Ratio Calendar Spread

Ratio Calendar Spread

Selling more near-term options than longer-term ones purchased, all with the same strike; either puts or calls.


Butterfly spread

Butterfly spread

Applies 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 spread

Calendar spread

The 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 spread

Price spread

An options strategy that involves buying and selling two options on the same security with the same expiration month, but with different exercise prices.


Further Suggestions

Credit spread
Bid 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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