Chapter 06 · Section 6.1

What is a spread?

A spread represents an options strategy consisting of the sale and the purchase of the same number of options at the same time, which may differ in exercise prices and expiration dates.

• The Horizontal Spread, also called Time Spread or Calendar Spread, is a combination of positions with different expiration dates.
• The Vertical Spread is a combination of positions with different strike prices.
• The Diagonal Spread is a combination of positions with different expiration dates and different strike prices.