Glossary term
Spread (Options Spread)
Any options position combining a long and a short option; vertical, horizontal (calendar), and diagonal are the main variants.
An Options Spread is any position that combines a long option and a short option to shape the risk and cost profile. Verticals use the same expiry with different strikes, calendars use the same strike with different expiries, and diagonals differ on both. Spreads define maximum gain and loss in advance, which is why Closelook's derivatives book is built on spreads rather than naked options. See Greeks 101.