spreading

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Spreading

An options strategy in which one buys one option contract while selling another on the same underlying asset, but with either a different strike price, a different expiration, or both. Spreading allows the investor to profit from price movements between the two option contracts. It can be a form of speculation. See also: Strike spread.

spreading

The establishment of a long position in an option and a short position in another option of the same class but with a different strike price or expiration date, or both. Spreading is supposed to achieve profit from a difference in relative price movements of two options of the same class.