The simultaneous writing of one put option with a higher strike price and the purchase of another put option with a lower strike price. Example: writing 1 XYZ May 60 put, and buying 1 XYZ May 55 put.
The simultaneous purchase of a call option with a lower striking price and sale of a call option with a higher striking price.
An option spread so designed that a profit will result if the underlying security increases in market value.
an option strategy that speculates on a rise in the price of a security or commodity.
Long a nearby contract versus a short position in a deferred contract. Usually biased towards higher prices.
An option strategy designed to profit from a rise in a security's price, by buying a near-month futures contract and selling a deferred month futures contract. see also spread, bear spread, butterfly spread, vertical spread.
In relation to options transactions, any spread in which a rise in the price of the underlying asset will theoretically increase the value of the spread. (Opposite of Bear Spread).
A spread position taken with the expectation that the futures price will rise.
an option combination designed to profit from rising stock prices
a strategy involving two or more options that will result in a profit from a rise in price of the underlying asset
This spread pays an arbitrarily capped portion of the underlying's positive performance on maturity, A combination of plain vanilla options usually based on a single underlying.
An option spread (qv) of either puts (qv) or calls (qv) whereby the holder of the position benefits when prices rise.
An option strategy in which the maximum profit is attained if the underlying security rises in price. Either calls or puts can be used. The lower strike price is purchased and the higher strike price is sold. The options have the same expiration date.
Is an option strategy which is structured to profit from price increases in the underlying market. These spreads can be done for credits or debits. They can be built with calls or puts. When these strategies are done one-for-one, then the purchase of the lower strike and the sale of the higher strike establish the bullish characteristic. Here, the common strategies are vertical, diagonal, and weighted spreads.
an option strategy designed to allow the trader to participate, with limited risk and limited return, in the rise of a currency
In most commodities and financial instruments, the term refers to buying the nearby month, and selling the deferred month, to profit from the change in the price relationship.
An option position established by the simultaneous buying and selling of options in a way that will profit from an increase in the underlying currency market prices. One leg of the option spread will profit if the underlying currency increases. The other leg will gain if the market unexpectedly declines. Thus the two legs together produce an option spread that will on balance, gain from a market increase, while protecting against a market decline by limiting losses in that event.
bunching butterfly spread
The purchase of near month futures contracts against the sale of deferred month futures contracts in expectation of a price rise in the near month relative to the deferred. One type of bull spread, the limited risk spread, is placed only when the market is near full carrying charges. See Limited risk spread.
A simultaneous purchase of a nearby delivery month and sale of a deferred delivery month fixed income future in expectation of short-term interest rates falling, thereby increasing the relative attractiveness of the front month contract.
A spread which is put on with the expectation that future prices will rise.
A spread strategy in which an investor buys an out-of-the-money put option and finances this purchase by selling an out-of-the-money call option on the same underlying.
An option strategy wherein the investor profits when the underlying security's price rises (vs. Bear Spread). There are three types of bull spreads: Vertical Spread: Concurrently buying and writing (selling) the same options class and the same expiration date, but with different exercise prices. Calendar Spread: Simultaneously buying and writing the same options class and sale of options of the same price but at different expiration dates. Diagonal Spread: Simultaneously buying and writing the same options class at different exercise prices and different expiration dates. A diagonal spread combines a vertical and a calendar spread.
spread strategy in which an investor buys an out-of-the-money put option, financing it by selling an out-of-the money call option on the same underlying security.
The simultaneous purchase of one call option with a lower strike price and the writing of another call option with a higher strike price. E.g.: Buying 1 XYZ Jan 50 call, and writing 1 XYZ Jan 55 call.
The simultaneous writing of one put option with a higher strike price and the purchase of another put option with a lower strike price. E.g.: Writing 1 XYZ Jan 55 put, and buying 1 XYZ Jan 50 put.
An option spread position in which the investor profits from a rise in the underlying security's price (vs. Bear Spread).
opposite of Bear Spread (see above) A trading position based on simultaneously buying the selling the Front and selling to take advantage of a potentially rising market
The simultaneous purchase and sale of two futures contracts in the same or related commodities with the intention of profiting from a rise in prices but at the same time limiting the potential loss if this expectation is wrong. In agricultural commodities, this is accomplished by buying the nearby delivery and selling the deferred. One type of bull spread, the limited risk spread, is placed only when the market is near full carrying charges. See Limited Risk Spread.
A strategy involving two or more options of the same type (or options combined w...
A debit spread in which a rise in the price of the underlying security will theo...
A credit spread in which a rise in the price of the underlying security will the...
1) The simultaneous purchase and sale of two futures contracts in the same or related commodities with the intention of profiting from a rise in prices but at the same time limiting the potential loss if this expectation is wrong. This can be accomplished by buying the nearby delivery and selling the deferred. 2) A delta-positive options position composed of both long and short options of the same type, either calls or puts, designed to be profitable in a rising market. An option with a lower strike price is bought and one with a higher strike price is sold.
Long the nearby future and short the deferred in anticipation of an increase in the general level of prices, with the nearby future expected to increase more than the deferred contract.
An option strategy that achieves its maximum potential if the underlying security rises far enough, and has its maximum risk if the security falls far enough. An option with a lower striking price is bought and one with a higher striking price is sold, both generally having the same expiration date. Either puts or calls may be used for the strategy. See also Bear Spread.
An option strategy executed with calls or puts that will profit if the value of the underlying stock rises.
Where the value of a spread will be increased by a rise in the price of the underlying asset.
The bull spread is an option strategy in which potential profits are tied to increases in the price of the underlying security. See: Bear Spread
see Spread trading strategy.
An example of a vertical spread, constructed by the purchase of a low strike call ( put) and the sale of a high strike call (put), both options being on the same underlying and having the same delivery month. Entered into when moderately bullish.