option spread(redirected from Option Spreads)
The trading of options of the same class at the same time in order to profit from changes in the size of the spread between different options.
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An investment strategy in which one has a long position on an option contract while having a short position on another option on the same underlying asset, with a different strike price and/or expiration date. One uses an option spread to profit from price movements in the underlying asset. There are a number of different kinds of option spreads. See also: Call Spread, Put spread.
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Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.