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Financial Terms related to Spread
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glossary with more than five thousand financial
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Findthousandsoffinancialtermsatwww.
ftpall.
com
Financial Terms related to Spread
This document is part of the valuable contents
available at www.
ftpall.
com, a free online
glossary with more than five thousand financial
and business terms.
This document can be copied and distributed freely
respecting its original format.
It is forbidden its
transcription, translation or change on its format
without authorization of its author or editor.
SPREAD
Back spread or backspread
• Is a position where you buy more options relative to the number of sold options.
This strategy typically is placed in the expectation of a dramatic move.
Compare to
Ratio Spread.
Bear spread
• Is an option strategy which is structured to profit from price declines 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 higher strike and the sale of the lower strike establishes the bul
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