spread order

Spread order

An order listing the series of options that the customer wants to buy and sell and the desired spread between the premiums paid and received for the options.

Spread Order

An order to a broker to buy and sell different options on the same underlying asset but for different premiums and/or strike prices. The client who makes the spread order hopes to profit from the difference between the prices in the options sold and the options bought. See also: Spread strategy.

spread order

An order to buy and to sell options of the same class but with different strike prices and/or expiration dates in which the customer specifies a spread between the option sold and the option purchased. For example, an investor might enter a spread order to buy a March call and sell a September call, both on AOL Time Warner and with a strike price of $30, if a spread of $2 can be obtained. The order will be executed only if a floor broker can sell the September call for $2 more than the price at which the March call can be purchased.