Exchanges

Box Spread

August 20, 2020
Exchanges

Buy The Rumor, Sell The News

August 20, 2020

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A trade that involves purchasing a security or derivative contract for the sole purpose of selling at a profit later in a more favorable market- i.e., selling at a higher price, with a positive difference between original purchase price minus purchase-related commissions on the one side and selling price net of sale-related commissions and fees on the other:

Gains = (purchase price – purchase commissions) – (selling price – sale commissions)

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