Option arbitrage in which a profitable position is established with no risk. One spread is established with call options. The other spread is established using put options.
A combination of a horizontal, or calendar, call spread and a horizontal put spread with the same expiration dates.
A four-sided option spread that involves a long call and a short put at one stri...
A Box Spread uses a bull spread and a bear spread to establish a near-riskless position. One spread uses call options and the other uses put options. One implementation can be two debit spreads (a call bull spread and put bear spread). Another implementation can be two credit spreads (a call bear spread and a put bull spread).
A type of option arbitrage in which both a bull spread and a bear spread are established for a near-riskless position. One spread is established using put options and the other is established using calls. The spread may both be debit spreads (call bull spread vs. put bear spread) or both credit spreads ( call bear spread vs. put bull spread). Break-Even Point--the stock price (or prices) at which a particular strategy neither makes nor loses money. It generally pertains to the result at the expiration date of the options involved in the strategy. A "dynamic" break-even point is one that changes as time passes.
An option position in which the owner establishes a long call and a short put at one strike price and a short call and a long put at another strike price, all of which are in the same contract month in the same commodity.
In options trading a box spread is a combination of positions that has a certain (i.e. riskless) payoff. For example, a bull spread constructed from calls (e.g. long a 50 call, short a 60 call) combined with a bear spread constructed from puts (e.g. long a 60 put, short a 50 put), has a constant payoff of the difference in exercise prices (e.g. 10). Under the no-arbitrage assumption the net premium paid out to acquire this position should be equal to the present value of the payoff.