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

Bear spread

Bear spread

A 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 spread

Perpendicular spread

Option strategy involving the purchase of options with similar expiration dates and different exercise prices.


Spreadsheet

Spreadsheet

A computer program that organizes numerical data into rows and columns in order to calculate and make adjustments based on new data.


Spread income

Spread income

Also 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 spread

Dealers spread

See: markdown; underwriting spread.


Further Suggestions

bear call spread
backspread
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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