Chapter 06 · Section 6.1

Option Positions

Pro-memoria: A spread is created by purchasing or selling calls, puts or a combination of the two; The strike prices and expiration months are different. Which option positions can be used to create a vertical spread?

Options with:

a) different expiration dates and different exercise prices.
b) different expiration dates and the same exercise price.
• c) same expiration date and different exercise prices.
  Yes. In either Calls or Puts the vertical spread takes its name from the fact that the options used to create the spread are listed vertically within an options price table. The blue combinations for calls and the red ones for puts. Continue

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