Horizontal Spread


DEFINITION of 'Horizontal Spread'

An options strategy involving the simultaneous purchase and sale of two options of the same type, having the same strike price, but different expiration dates.

BREAKING DOWN 'Horizontal Spread'

An example of this would be the purchase of a Dec 20 call and the sale of a June 20 call. This strategy is used to profit from a change in the price difference as the securities move closer to maturity.

Also referred to as "calendar spread" or "time spread".

  1. Maturity

    The period of time for which a financial instrument remains outstanding. ...
  2. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  3. Calendar Spread

    An options or futures spread established by simultaneously entering ...
  4. Call

    1. The period of time between the opening and closing of some ...
  5. Exercise

    To put into effect the right specified in a contract. In options ...
  6. Expiration Date (Derivatives)

    The last day that an options or futures contract is valid. When ...
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