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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 or a vertical spread. 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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