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". For example, a bull spread constructed from calls (e.g., long a 50 call, short a 60 call) combined with a bear spread constructed from puts (e.g., long a 60 put, short a 50 put) has a constant payoff of the difference in exercise prices (e.g. 10) assuming that the underlying stock does not go ex-dividend before the expiration of the options. If the underlying asset has a dividend of X, then the settled value of the box will be 10 + x.[1] Under the no-arbitrage assumption, the net premium paid out to acquire this position should be equal to the present value of the payoff.
Box spreads' name derives from the fact that the prices for the underlying options form a rectangular box in two columns of a quotation. An alternate name is "alligator spread," derived from the large number of trades required to open and close them "eating" one's profit via commission fees.
Box spreads are usually only opened with European options, whose exercise is not allowed until the option's expiration. Most other styles of options, such as American, are less suitable, because they may expose traders to unwanted risk if one or more "legs" of a spread are exercised prematurely.
^Claussen, Steve (10 December 2010). "An Important Word of Caution on Short Box-Spread Trades!". Nasdaq.
In options trading, a boxspread is a combination of positions that has a certain (i.e., riskless) payoff, considered to be simply "delta neutral interest...
combination of a bull put spread and a bear call spread. A boxspread consists of a bull call spread and a bear put spread. The calls and puts have the...
In descriptive statistics, a box plot or boxplot is a method for demonstrating graphically the locality, spread and skewness groups of numerical data through...
the cost of entering into the position. Bull spreadBoxspread Ladder (option combination) Options spread Option McMillan, Lawrence G. (2002). Options...
joke. After the rumors spread widely in schools and on social media, the Public Schools Branch denied claims of litter boxes, with the director of the...
increased credit spread. This explains, for example, the Option Adjusted Spread on a Ginnie Mae MBS relative to the Treasury curve. Credit Spread Risk: The risk...
outside the “box” surrounding the quarterback and the center at the line of scrimmage in a formation that has come to be known as the “Meyer Spread,” also known...
dispersion, which is the spread of the data. The IQR may also be called the midspread, middle 50%, fourth spread, or H‑spread. It is defined as the difference...
seventy species in the family Buxaceae. Common names include box or boxwood. The boxes are native to western and southern Europe, southwest, southern...
of these positions, although straps, webbing, chains, hooks, manacles, spreader bars, collars, common furniture, purpose-built frames, various gags and...
ability, they are often referred to as deep-lying midfielders, play-makers, box-to-box midfielders, or holding midfielders. There are also attacking midfielders...
a cell spreader or plate spreader is a tool used to smoothly spread cells and bacteria on a culture plate, such as a petri dish. Cell spreaders can be...
'Latifolia Maculata' A pest which spreads through Buxus sempervirens is Cydalima perspectalis, the box tree moth. A kind of box, B. microphylla is more injured...
A post box (British English; also written postbox; also known as pillar box), also known as a collection box, mailbox, letter box or drop box (American...
Pachysandra terminalis, the Japanese pachysandra, carpet box or Japanese spurge, is a species of flowering plant in the boxwood family Buxaceae, native...
Ban the Box is an American campaign by advocates for ex-offenders aimed at removing the check box that asks if applicants have a criminal record from...
FarPoint Spread is a suite of Microsoft Excel-compatible spreadsheet components available for .NET, COM, and Microsoft BizTalk Server. Software developers...
David Parker Ray (November 6, 1939 – May 28, 2002), also known as the Toy-Box Killer, was an American kidnapper, torturer, serial rapist and suspected...
Luftwaffe tactics of attacking the extremities of formations. The wing box was often spread 3,000 ft (910 m) vertically, 7,000 ft (2,100 m) deep, and 2,000 ft...
royal beds. In the 19th century the bed spring was invented, also called the box spring. In the 20th century United States, consumers bought the inner spring...