option spread

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Option spread

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.

Option Spread

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.

option spread

References in periodicals archive ?
Garner says many of her clients use option spreads and other strategies instead of buying options outright.
The new fund will identify and exploit opportunities created by systemic mispricing of option spreads and volatility.
Specializing in advanced technical analysis, option spreads and the Greeks!
The fund seeks to monetize volatility using a non-directional methodology that invests in option spreads. The objective is to preserve principle while generating upside return regardless of market direction.
The Tax Court has taken the position that spread transactions are not "similar arrangements" within the meaning of IRC Section 465(b)(4), and that losses on stock option spreads are thus not limited by the "at risk" rule.
(For the underlying decision in the latter case, see 100 AFTR2d 2007-5591 and "Tax Matters: Economic Substance Prevails Against Another Son of BOSS," JofA, March 08, page 71.) Both cases involved foreign currency option spreads that the IRS deemed tax-avoidance shams.
The authors conclude that federal reinsurance would be most appropriate for large terrorist events and that the most efficient design would be securitization through the auction of federal excess-of-loss reinsurance call option spreads covering terrorist attacks.
Size option spreads in iShares China Fund as the trade-hope rally continues.
Target call volume increases after large option spreads Friday.
Notable option spreads in SPDR Oil Exploration and Production Fund.
Axalta Coating Systems attracts bullish option spreads. The stock up 20c to $30.12 and 10K Apr 28 puts trade at $1.05 along with 10K Apr 32 - 38 call spreads for $1.30.
Electronics Arts attracts two days of bullish option spreads. The stock off $1.13 to $127.90 and has now shed 5.7% since earnings on 7/26.