horizontal spread

horizontal spread definition - finance
A trading strategy in the options market that involves the purchase of a call or put option and the simultaneous sale of the same type of option with the same strike price and a different expiration month. Option spreads allow investors to speculate on relative price changes, and thus create another way to make profits, instead of just betting on a direct price change in one investment. Also called calendar spread.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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