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Sell a Spread |
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Sell a Spread In options, to write a contract for a higher premium than a contract with the same underlying asset that one buys. For example, one my write a put option with a certain underlying after buying a similar put option with the same underlying, though often with a shorter expiration date. One sells a spread to hedge investments: in this case, if either option is exercised, the investor has still made a profit by selling the contract at a higher premium that the one he/she paid for buying the other contract. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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