Box Spread
Definition
A combination of a bull call spread and a bear put spread with the same strikes and expiration, creating a risk-free arbitrage if mispriced.
Example
A box spread locks in a guaranteed profit when priced below its theoretical value.
Related Terms
Frequently Asked Question
What is a Box Spread in options?
A Box Spread combines a bull call spread and a bear put spread with the same strikes and expiration. When mispriced, it creates a risk-free arbitrage opportunity — the spread should always equal the present value of the strike difference.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.