Option position expressing a certain caution, consisting of a total of four contracts with the same expiration date and thereby – the purchase of an option with a low exercise price (strike price), – the sale of two options with medium strike prices and – the purchase of an option with a higher strike price. – Thus, two calls (call options) are bought at two different strike prices on one date. In addition, two calls are sold at a price that lies between the two purchased calls. In this way, any loss can normally be kept within relatively narrow limits. – See Bull Spread, Call, Option, Commodity Forward Contract, Stella Transaction, Straddle, Strangle.
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