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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 MatchesBear spreadBear spreadA strategy in options trading in which an option is purchased at an exercise price above that of the underlying instrument and simultaneously an option is sold at an exercise price below that of the underlying instrument, both with reference to the same expiry month. This applies to either call options or put options. Perpendicular spreadPerpendicular spreadOption strategy involving the purchase of options with similar expiration dates and different exercise prices. SpreadsheetSpreadsheetA computer program that organizes numerical data into rows and columns in order to calculate and make adjustments based on new data. Spread incomeSpread incomeAlso called margin income, the difference between income and cost. For a depository institution, the difference between the assets it invests in (loans and securities) and the cost of its funds (deposits and other sources). Dealers spreadDealers spreadSee: markdown; underwriting spread. Further Suggestionsbear call spreadbackspread Spread option Time spread strategy condor spread call spread Underwriting spread Calendar spread Butterfly spread Debit spread put spread Generic credit spread NOB spread Selling the spread Intracommodity spread bull spread diagonal spread Mob spread Maturity spread Diagonal spread Option spread Spread calendar spread Bull spread Interdelivery spread |
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