Short Leg

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Dictionary Says

Definition of 'Short Leg'

Any contract in an option spread in which an individual holds a short position. If a trader has created an option spread by purchasing a put option and selling a call option, the trader's short position on the call would be considered the short leg.
Investopedia Says

Investopedia explains 'Short Leg'

Option spreads are positions created by options traders by buying and selling an equal number of option contracts, with differing strikes, on the same underlying security. Option spreads are used to limit overall risk by ensuring that gains and losses are restricted to a range. Additionally, option spreads can serve to bring the costs of options positions down, since traders will collect premiums from contracts in which they short.

Directory (Option Strategy)

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  4. Backspread

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  7. Bear Put Spread

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  12. Bull Put Spread

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  13. Bull Spread

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  14. Bullet Trade

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  16. Buy A Spread

    Option strategy ...
  17. Calendar Spread

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  18. Call Ratio Backspread

    A very bullish ...
  19. Collar

    1. A protective ...
  20. Collar Agreement

    An arrangement ...
  21. Condor Spread

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  22. Contingent Order

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  23. Conversion Arbitrage

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  24. Covered Call

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  25. Covered Combination

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  26. Covered Straddle

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  27. Credit Spread

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    An optional ...
  29. Debit Spread

    Two options with ...
  30. Delta Hedging

    An options ...
  31. Delta Neutral

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  32. Delta Spread

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  33. Diagonal Spread

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  34. Dividend Arbitrage

    An options ...
  35. Double One-Touch Option

    A type of exotic ...
  36. Fence (Options)

    A fence or ...

  37. Fiduciary Call

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  38. Fixed Dollar Value Collar

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  39. FMAN

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  40. Forex Hedge

    ...
  41. Forex Option & Currency Trading Options

    ...
  42. Form 6781: Gains And Losses From ...

    A tax form ...

  43. Front Fee

    The option ...
  44. Gut Spread

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  45. Heston Model

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  46. Horizontal Spread

    An options ...
  47. Implied Volatility - IV

    The estimated ...
  48. Interest Rate Collar

    An investment ...
  49. Iron Butterfly

    An options ...
  50. Iron Condor

    An advanced ...
  51. Leg

    1. Term ...
  52. Leg Out

    One side of a ...
  53. Long Jelly Roll

    An option ...
  54. Long Leg

    The part of ...

  55. Long Put

    An options ...
  56. Long Straddle

    A strategy of ...
  57. Long-Term Equity Anticipation ...

    Publicly traded ...
  58. Married Put

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  59. Modidor

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  60. Multi Index Option

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  61. Multi-Leg Options Order

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  63. Naked Put

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  64. Negative Butterfly

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  65. Net Option Premium

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  66. Neutral

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  67. Option Premium

    1. The income ...
  68. Outright Option

    An option that ...
  69. Overwrite

    A type of ...
  70. Overwriting

    An options ...

  71. Positive Butterfly

    A ...
  72. Protective Put

    A ...

  73. Put

    An option ...
  74. Put Calendar

    An option ...
  75. Put Ratio Backspread

    An option ...

  76. Ratio Call Write

    An option ...
  77. Ratio Spread

    An options ...
  78. Reverse Calendar Spread

    An options or ...
  79. Reverse Conversion

    A finance and ...
  80. Risk Reversal

    1. ...
  81. Roll Down

    The replacement ...
  82. Roll Forward

    To extend the ...
  83. Roll Up

    The move from ...

  84. Seagull Option

    A three-legged ...
  85. Sell To Open

    A phrase used by ...
  86. Series 4

    A securities ...
  87. Short Leg

    Any contract in ...
  88. Short Straddle

    An options ...
  89. Straddle

    An options ...
  90. Strangle

    An options ...
  91. Swing Option

    A type of ...

  92. Synthetic Dividend

    A type of ...
  93. Variable Ratio Write

    An option ...
  94. VIX Option

    A type of ...
  95. Writing An Option

    The ...

  96. Zero Cost Collar

    A type of ...
  97. Zomma

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Related Definitions

  1. Bull Call Spread

    An options ...
  2. Bear Call Spread

    A type of ...
  3. Spread

    1. The ...
  4. Vertical Spread

    An options ...
  5. Exercise

    To put into ...
  6. Volatility

    1. A statistical ...
  7. Risk Capital

    Investment funds ...
  8. Price Risk

    The risk of a ...
  9. Cum Rights

    A shareholder of ...
  10. Security

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