Also found in: Dictionary, Wikipedia.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
In an option spread, the portion that is a long position. For example, if a spread consists of a long position on one option and a short position on a similar option, the long position is called the long leg. It should not be confused with a leg in a swap.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
The side of an option spread (that is, one option bought long and one option sold short) that an investor is long. With a spread that involves owning a June 20 put and being short a March 20 put, the June 20 put represents the long leg. Compare short leg.
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.