Spread. A spread is like a straddle a double privilege, a put and a call combined. If the stock-goes
below the price named in the put end (or part), plus the cost of the spread, the holder of the
spread profits; so, also, if the stock goes above the price named in the call end (or part), plus the
cost of the call, the holder of the call profits.
Illustration: A spread on 100 shares may be bought on which the stock may be called (called for)
at 102 1-2, or put (delivered) at 97 1-2. Say, 2 1-2 per cent ($250) is paid for the spread. Then
the stock must go above 105 or below 95 before there is a profit in the spread.
below the price named in the put end (or part), plus the cost of the spread, the holder of the
spread profits; so, also, if the stock goes above the price named in the call end (or part), plus the
cost of the call, the holder of the call profits.
Illustration: A spread on 100 shares may be bought on which the stock may be called (called for)
at 102 1-2, or put (delivered) at 97 1-2. Say, 2 1-2 per cent ($250) is paid for the spread. Then
the stock must go above 105 or below 95 before there is a profit in the spread.
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