Box Spreads

Box spreads are arbitrage option strategies with four legs: long call and short put (both with the same strike), combined with short call and long put (also with the same strike). Depending on the order of strikes, the box spread is either long (debit) or short (credit).

Box Spreads as Combinations of Vertical Spreads

Each box spread can also be considered a combination of two vertical spreads with matching strikes:

Bull call spread + bear put spread = long box spread

Bear call spread + bull put spread = short box spread

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