call spread

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Call Spread

An option spread in which one has a long position in a call while having a short position on another call on the same underlying asset with a different strike price and/or expiration date. One uses a call spread to profit from price movements in the underlying asset. See also: Put spread.

call spread

An option position in which a call is purchased while another call on the same security is sold short. The two calls have different strike prices, different expiration dates, or both. Also called option spread. Compare put spread. See also spread.

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I've stopped buying stocks for now, although I'm getting ready to buy call spreads to capture the rise when the market resumes its rally.

To play a call spread, an investor buys call options at a specific strike price while also selling the same number of calls at a higher strike price, a way to capture a potential rise in the market without directly buying shares.

European shares drift higher

In practice, traders prefer negotiating call spreads, further limiting their associated payoffs.

Notice that the call spreads 100/120 and 120/140 have almost identical discounted expected payoffs.

HOW FINANCIAL THEORY APPLIES TO CATASTROPHE-LINKED DERIVATIVES--AN EMPIRICAL TEST OF SEVERAL PRICING MODELS. [*]

One version of CAT risk securities are the CAT call spreads currently traded on the Chicago Board of Trade.

The Insurance Link to Securities

Amid much fanfare, the Chicago Board of Trade (CBOT) launched catastrophe insurance futures contracts (CAT futures) in 1992 and catastrophe insurance futures call spreads (CAT spreads) in 1993, with contract values linked to the loss ratios compiled by the Insurance Services Office (ISO).

Pricing catastrophe insurance futures call spreads: a randomized operational time approach

The stock up 21c to $16 and 5K Mar 20 - Apr 17 call spreads trade at 50c and 4.

Valeant calls active as notable spreads trade early Tuesday

60 and 5K Apr 52 - 56 call spreads bought to open for 88c.

Bullish short-term trades in iShares Mexico Fund

8K Sep 22 - 26, 1X2, call spreads trade for even money.

Bullish option play opened in Finisar ahead of earnings

The ratio spread likely rolls 15K Apr 45 - 50 call spreads to a new bullish position in 22.

Micron calls outpace puts more than 5:1 as shares rally

5 puts trade at 34c along with 62K Mar 51 - 53 call spreads for 47c.

Notable put buyer in iShares Emerging Markets Fund

In today's column, we're going to make this option play even more discernible by analyzing a hypothetical short call spread on tanker titan Nordic American Tanker Shipping Limited (NYSE: NAT).