Price-spread meaning

An options strategy in which one option covering a stock or futures contract is bought while another option covering the same stock or futures contract and with the same expiration month, but with a different exercise price, is sold. For instance a price spread occurs when an S&P 500 September call with a strike price of 850 is bought while an S&P 500 September call with a strike price of 800 is sold. Also called vertical spread.
0
1
Advertisement