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".

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