Spread strategy

Spread strategy

A strategy that involves a position in one or more options so that the cost of buying an option is funded entirely or in part by selling another option in the same underlying. Also called spreading.

Spread Strategy

Any of several investment strategies that involve maintaining different positions on options or futures with the same underlying asset, often with different expiration dates. Spreading may take many different forms, and is designed to hedge against loss regardless of price movements on the underlying asset.
References in periodicals archive ?
The bull call spread strategy is an extension of the long call strategy, which we had explained in our October 2009 issue (Take a Call).
Let us consider an example to understand the bull call spread strategy.
The call spread strategy requires purchase of call option 1 and sale of call option 2, where [X.

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