strike spread

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Strike Spread

In options, an investment strategy involving the sale of one option and the purchase of another option identical to the first in every way except the strike price. For example, an investor may write a call giving the buyer the right to buy 1,000 barrels of oil with a strike price of $50 per barrel, and, at the same time, buy a call giving himself/herself the right to buy the same amount of oil at $40 per barrel. In the event that both options are exercised, the investor profits on the difference in the strikes. A strike spread is also called a money spread, a vertical spread, or a price spread.

strike spread

References in periodicals archive ?
ICBC has recently launched automatic oil contract renewal function, and lowered the price spreads across the board to facilitate retail customers in account crude oil trading via cheaper and easier-to-use service, according to an announcement of the Bank today.
Improved Throughput Volumes and Oil Price Spreads Through MidPoint of Fourth Quarter
DGCX will have market makers in place from the very first day of trade to ensure high liquidity and competitive price spreads.
But usage rates are as much governed by price spreads as they are by outright price levels, and the recent sharp widening in 2012 to 2013 soybean spreads suggests end users have a strengthening incentive to postpone purchases for as long as possible even after the recent steep pullback in nearby prices.
W hile we strive to display fixed price spreads at all times, there may be occasions, however rare, where a significant market or world event may force us to widen spreads without prior notice to our clients.
This has reduced the price spreads necessary to attract Rockies gas and significantly reduced utilization of the REX Pipeline.
Transportation revenue was up 35% year over year, which reflects cash flows from expansion projects and the impact of pipeline anomalies last year, but masks lower interruptible and short-term firm transportation revenue resulting from weaker natural gas price spreads.
Could the wider store brand/national brand price spreads in non-foods make store brand foods seem overpriced?
In its summary it concluded: "A comparison of the level in 2001 of the various farmgate retail price spreads shows that in all but two cases, the UK spreads are among the lowest of the EU member states in our sample.
In July, the House Energy and Commerce Committee sent letters to more than two dozen drug makers and three drug wholesalers asking for them to produce documents and answer questions about sales, revenue, drug prices, rebates to Medicaid programs, price spreads, price calculation methods and largest buyers.
For deals at closing prices on a preset date, brokerages may be tempted to engage in massive selling just before the end of the day in a bid to take advantage of price spreads.
While price spreads between offshore and domestic sides are widening, the tone for many paper stock dealers seems to be that domestic mills will have to start raising prices if they hope to keep a steady flow of material coming through their doors.