Advertising

Horizontal spread

• Is a spread which is composed of two puts or two calls on the same underlying instrument. It is called horizontal because both options have the same strike or exercise price but two different expiration dates. Generally, the trade is placed with the nearby option sold and the deferred option purchased. This is an attempt to capitalize on the acceleration in time value decay for the nearby relative to the deferred contract month.

• The simultaneous purchase and sale of two options that differ only in their exercise date.

 
 

Follow this link for all the terms related to spread.

 
 Embedded terms in definition
 Contract month
Contract
Exercise price
Exercise
Expiration date
Expiration
Nearby
Options
Option
Purchase and sale
Purchase
Sale
Spread
Time value
Time
Trade
Underlying
 
 Related Terms
 

<< Horizontal merger Host security >>

Beware of fraud originating in phone messages and faxes: FDIC Consumer News has warned before about crooks who call or e-mail consumers and pretend to be legitimate companies or government agencies wanting people to "verify" or "resubmit" (divulge) confidential information such as bank account or credit card numbers as well as Social Security numbers, passwords and personal identification numbers. Here are variations to know about. More...

Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity. - George S. Patton

Advertising



Copyright 2009-2018 GVC. All rights reserved.