Posted by R. MAK. on August 15, 2009 ·
Compound option or split fee option is option on an option. the value of another option is involved in the exercise payoff of a compound option. Then a compound option has got two expiration dates and two strike prices. Compounded options are often used by the traders for…
Posted by R. MAK. on August 9, 2009 ·
In finance, If there is an involvement of a purchase of one option and a sale of another option in the same class and expiration but different strike prices then it is referred to as a credit spread, or net credit spread. For entering the position investors receive a net credit, and they want the spreads to narrow or expire for profit. On the contrary, to enter a debit spread an investor would…
