| CHAPTER 10 |
Spreading strategies are among the most common strategies done in option markets. In a spreading strategy a trader will take a position in one contract or set of contracts, and an opposing position in a different contract or set of contracts. The opposing positions may be directional (delta), or they may be volatility (gamma or vega) positions.
1. Contracts are trading at the following prices:
What will be your credit (+) or debit (–) if you do each of the following?
a. buy 1 contract A and sell 1 contract C
b. buy 1 contract B and sell 1 contract D
c. buy 1 contract B and sell 2 contract A
d. buy ...