Backspread
Definition of 'Backspread'A type of options spread in which a trader holds more long positions than short positions. The premium collected from the sale of the short option is used to help finance the purchase of the long options. This type of spread enables the trader to have significant exposure to expected moves in the underlying asset while limiting the amount of loss in the event prices do not move in the direction the trader had hoped for. This spread can be created using either all call options or all put options. |
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Investopedia explains 'Backspread'An example of a backspread using call options would be selling one $45 call option for $5 and purchasing two $50 call options for $2.10 each. The trader in this case would benefit from a large move past $50 because he/she is holding more long options than short. |
Directory (Option Strategy)
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Alligator Spread
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Atlantic Spread
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Back Fee
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Backspread
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Bailard, Biehl And Kaiser Five-Way Model
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Bear Call Spread
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Bear Put Spread
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Bear Spread
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Bear Straddle
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Box Spread
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Bull Call Spread
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Bull Put Spread
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Bull Spread
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Bullet Trade
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Butterfly Spread
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Buy A Spread
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Calendar Spread
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Call Ratio Backspread
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Collar
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Collar Agreement
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Condor Spread
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Contingent Order
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Conversion Arbitrage
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Covered Call
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Covered Combination
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Covered Straddle
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Credit Spread
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Death Put
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Debit Spread
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Delta Hedging
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Delta Neutral
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Delta Spread
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Diagonal Spread
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Dividend Arbitrage
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Double One-Touch Option
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Fence (Options)
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Fiduciary Call
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Fixed Dollar Value Collar
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FMAN
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Forex Hedge
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Forex Option & Currency Trading Options
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Form 6781: Gains And Losses From Section ...
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Front Fee
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Gut Spread
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Heston Model
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Horizontal Spread
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Implied Volatility - IV
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Interest Rate Collar
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Iron Butterfly
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Iron Condor
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Leg
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Leg Out
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Long Jelly Roll
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Long Leg
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Long Put
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Long Straddle
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Long-Term Equity Anticipation Securities ...
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Married Put
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Modidor
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Multi Index Option
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Multi-Leg Options Order
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Naked Call
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Naked Option
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Naked Position
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Naked Put
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Negative Butterfly
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Net Option Premium
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Neutral
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Option Premium
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Outright Option
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Overwrite
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Overwriting
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Positive Butterfly
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Protective Put
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Put Calendar
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Put On A Call
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Put On A Put
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Put Ratio Backspread
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Put To Seller
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Ratio Call Write
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Ratio Spread
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Reverse Calendar Spread
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Reverse Conversion
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Risk Reversal
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Roll Down
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Roll Forward
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Roll Up
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Seagull Option
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Sell To Open
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Series 4
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Short Leg
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Short Straddle
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Straddle
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Strangle
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Swing Option
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Synthetic Dividend
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Variable Ratio Write
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VIX Option
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Writing An Option
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Zero Cost Collar
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Zomma
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