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In derivatives trading, the term diagonal spread is applied to an options spread position that shares features of both a calendar spread and a vertical spread.It is established by simultaneously buying and selling equal amount of option contracts of the same type (call options or put options) but with different strike prices and expiration dates.
In finance, a calendar spread (also called a time spread or horizontal spread) is a spread trade involving the simultaneous purchase of futures or options expiring on a particular date and the sale of the same instrument expiring on another date. These individual purchases, known as the legs of the spread, vary only in expiration date; they are ...
A spread position is entered by buying and selling options of the same class on the same underlying security but with different strike prices or expiration dates. An option spread shouldn't be confused with a spread option. The three main classes of spreads are the horizontal spread, the vertical spread and the diagonal spread. They are grouped ...
Profit diagram of a box spread. It is a combination of positions with a riskless payoff. In options trading, a box spread is a combination of positions that has a certain (i.e., riskless) payoff, considered to be simply "delta neutral interest rate position".
A jelly roll, or simply a roll, is an options trading strategy that captures the cost of carry of the underlying asset while remaining otherwise neutral. [1] It is often used to take a position on dividends or interest rates, or to profit from mispriced calendar spreads.
The intrinsic value (IV) of an option is the value of exercising it now.If the price of the underlying stock is above a call option strike price, the option has a positive intrinsic value, and is referred to as being in-the-money.
[1] [2] Ladders are in some ways similar to strangles, vertical spreads, condors, or ratio spreads. [1] [3] [4] A long call ladder consists of buying a call at one strike price and selling a call at each of two higher strike prices, while a long put ladder consists of buying a put at one strike price and selling a put at each of two lower ...
A condor can be thought of as a spread of two vertical spreads, [5] as a modification of a strangle with limited risk, [1] or as a modification of a butterfly where the options in the body have different strike prices. [3]