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Seagull Spread

January 8, 2018

All option strategies named after birds involve at least three individual options.

The long position is the body of the seagull. It is often an ATM (At The Money)  put to provide downside protection. The two wings are sold (written) and are OTM (Out of The Money) they should be a call above and a put below the current spot price. These partially offset the cost of the hedge.

From → Asset Valuation

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