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.
The vertical spread takes its name from the fact that the options used to build the spread are listed vertically within an options price table.