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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 MatchesPrice 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. Horizontal spreadHorizontal spreadThe simultaneous purchase and sale of two options that differ only in their expiration dates. Call spreadCall spreadThe simultaneous purchase (sale) of a call at one exercise price and sale (purchase) of another call at a higher exercise price. Intercommodity spreadIntercommodity spreadIn the commodities market, a spread consisting of a long position and a short position in different but related commodities for example, speculating that the price relationship between the two commodities will change, e.g., platinum and gold. BackspreadBackspreadA delta-neutral spread composed of more long options than short options on the same underlying instrument. This position generally profits from a large movement in either direction in the underlying instrument. Further SuggestionsTED spreadInterdelivery spread Perpendicular spread Time spread strategy Yield spread Dealers spread Selling the spread Credit spread Intracommodity spread Narrowing the spread calendar spread put spread Ratio Calendar Spread Alligator spread diagonal spread Gross spread crack spread bull spread Vertical spread Spreadsheet Bull spread spread betting Spread position spread Calendar spread |
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