vertical spread

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Vertical spread

Simultaneous purchase and sale of two options that differ only in their exercise price. See: Horizontal spread.

Strike Spread

In options, an investment strategy involving the sale of one option and the purchase of another option identical to the first in every way except the strike price. For example, an investor may write a call giving the buyer the right to buy 1,000 barrels of oil with a strike price of $50 per barrel, and, at the same time, buy a call giving himself/herself the right to buy the same amount of oil at $40 per barrel. In the event that both options are exercised, the investor profits on the difference in the strikes. A strike spread is also called a money spread, a vertical spread, or a price spread.

vertical spread

References in periodicals archive ?
Nearly 720K puts traded in General Electric last week, vs 343K calls, with several massive spreads opening bearish vertical spreads in April and May just ahead of today's downgrade by JP Morgan that has shares expected to open down 50c, or 5% to $9.50 this morning.
Vertical spreads make good use of your space Statement pieces, such as a mirror or stone feature, can draw the eye or create an illusion of light and space In smaller spaces, don't just let the garden "happen" or evolve over time.
Vertical spreads in VIX April contracts after the January expiration.