The Law Dictionary

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CALL SPREAD Definition & Legal Meaning

Definition & Citations:

An OPTION position created by buying and selling CALL OPTIONS with the same expiry date but different STRIKE PRICES (i.e., the purchaser of a call spread buys a closertothemoney call option and sells a farther outofthemoney call option (a bullish strategy), the seller of a call spread does the reverse (a bearish strategy)). The spread limits the gain or LIABILITY to an area defined by the two strikes. See also BULL SPREAD, BEAR SPREAD, PUT SPREAD.


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