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What are option spreads?What are option spreads? There are three main types of option spreads the horizontal spread, the vertical spread and the diagonal spread. They are categorized by their relationship between the strike price and expiration dates of the options used.Vertical spreads, or money spreads, are spreads using options of the same underlying stock and the same expiration month, but at different strike prices. They can be used with either all calls or all puts. Horizontal, time spreads, or calendar spreads are spreads using options of the same underlying stock and the same strike prices but with different expiration dates. They can be used with either all calls or all puts. Diagonal spreads are spreads using options of the same underlying stock at different strike prices and expiration dates. They combine both, the vertical and horizontal spreads. They can be used with either all calls or all puts.
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