A combination of put and call options at different prices.
an option written on the differential between the prices of two commodities. Spread options may be based on the price differences between prices of the same commodity at two different locations (location spreads); prices of the same commodity at two different points in time (calendar spreads); prices of inputs to, and outputs from, a production process (processing spreads); and prices of different grades of the same commodity (quality spreads). The New York Mercantile Exchange offers the only exchange-traded options on energy spreads: the heating oil/crude oil and gasoline/crude oil crack spread options.
Option on difference between two contracts
A position involving the purchase of an option and the simultaneous sale of an o...
The simultaneous purchase and sale of options of the same type and of the same class. For example, an investor may purchase an XYZ September 50 call and sell an XYZ September 40 call. See: Bear Spread; Bull Spread; Class Of Option; Credit Spread; Debit Spread; Options; Option Spread; Spread; Spread Position
Spread options are options whose returns vary ac-cording to the difference between two interest rates, either in the same currency or in different currencies.