Spread option

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Spread option

A position consisting of the purchase of one option and the sale of another option on the same underlying security with a different exercise price and/or expiration date.

Spread Option

In options, the writing of a contract and the purchase of another with the same underlying asset, but with different strikes and expiration dates. A spread option is intended to reduce the risk of having a particular position on the underlying asset. The profit on a spread option comes from the difference in the strike prices of the two contracts. Spread options are usually traded over-the-counter. See also: Crack, Crush, Spark.
References in periodicals archive ?
One is energy security under which one would like to spread options so as not to depend solely on a fixed route or solution.
BANKING AND CREDIT NEWS-October 28, 2013--CME sees record WTI-Brent crude spread options volume(C)2013 M2 COMMUNICATIONS http://www.m2.com
M2 EQUITYBITES-October 28, 2013--CME sees record WTI-Brent crude spread options volume(C)2013 M2 COMMUNICATIONS http://www.m2.com
They include calls, puts, collars and spread options.
In this article, we consider European vanilla, binary, and spread options, whose final and boundary conditions are given in Section 6, where we provide numerical results.
Brussels, Belgium, February 05, 2012 --(PR.com)-- This new service offering was made into reality after the success of the Euro Interest Rate Spread Options matching during the last quarter of 2009 which, at present, has traded more than 5 billion Euros in speculative amount.
With attractive spread options thin on the ground, maybe this is a week to put all the eggs in one basket, and weigh in with a buy of Sporting's Graeme McDowell special at 40.
Modules are available with output specifications ranging from 500 to 1,500 lumens and with a choice of narrow, medium and wide flood beam spread options.
No market is as characterized by exotic option structures, volume options, spread options, caplets and floorlets, barriers and swing options as is power.
In the chapter, other forms of credit derivatives such as collateralized debt obligations (CDOs), total-return swaps, and spread options are also discussed.
In Silicon Valley, tech firms spread options liberally among workers in lieu of huge pay increases.
The final match of a series usually offers punters a bigger range of spread options as series specials become match specials.