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Spreadtion


An OTC option which is written on a spread. The spreadtion is usually used to lock in the difference between the prices of two or more assets. In this sense, a spreadtion can capitalize on yield differences between equities, currencies, bonds, etc.

Examples of a spreadtion are the crack spread, spark spread, and crush spread.

The spreadtion is also known as a spread option.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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