For Vertical Spread we have terms and definitions in 5 topics. The topics are Finance, Frauds and Scams, Investing, Options and Securities.

Vertical Spread (Finance)

Simultaneous purchase and sale of two options that differ only in their exercise price. See: Horizontal spread.

Vertical Spread (Frauds and Scams)

Strategy where an investor concurrently buys and sells options on the same underlying security--also called a price spread. Both options have identical expiration dates but different strike prices. For instance, a vertical spread is created by buying an XYZ April 20 call and selling an XYZ April 25 call. This strategy is used in hopes of profiting as the difference between the option premium on the two option positions widens or narrows.

Vertical Spread (Investing)

Strategy where an investor concurrently buys and sells options on the same underlying security--also called a price spread. Both options have identical expiration dates but different strike prices. For instance, a vertical spread is created by buying an XYZ April 20 call and selling an XYZ April 25 call. This strategy is used in hopes of profiting as the difference between the option premium on the two option positions widens or narrows.

See Also: Expiration Date; Option Premium; Options; Spread; Strike Price; Underlying Security

Vertical Spread (Options)

(1)Most commonly used to describe the purchase of one option and sale of another where both are of the same type and same expiration, but have different strike prices. (2)It is also used to describe a delta-neutral spread in which more options are sold than are purchased.

Vertical Spread (Securities)

An options spread position in which the expiration months are the same, but the strike prices differ. They are also called Money Spreads.

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