A box spread, commonly called a long box strategy, is an options arbitrage strategy that combines buying a bull call spread with a matching bear put spread. A box spread can be thought of as a vertical spread, but one that must have the same strike prices and expiration dates. A box spread is optimally used when the spreads themselves are underpriced with respect to their expiration values. When the trader believes the spreads are overpriced, they may employ a short box, which uses the opposite options pairs, instead. The concept of a box comes to light when one considers the purpose of the two vertical, bull call and bear put, spreads involved.
Download this template for a one-time fee of $15 and use with your MarketXLS subscription
Instant Delivery, One time price, exclusively made for MarketXLS users
This template uses MarketXLS functions to pull information. Without an active MarketXLS subscription it will not be useful. Read terms before purchasing
Read terms of purchase
See how MarketXLS helps you take advantage in the markets.