What is the box?

SEED BOX is a strategy that enters playing in options. The idea of ​​spreading a box is to create a situation in which there is a zero risk in terms of paying measures taken in the strategy. This basically includes the creation of an event chain that results in an arbitration assumption. The total number of net bonuses used in the acquisition process must be equal to the current value of the transaction. Box speration

uses a number of banquets and calls to obtain the desired result. In connection with this strategy, the investor may decide to follow university spread with the bear spread to create the required balance between bonus and payout. Sulfur bull may include the possibility of long calls associated with the possibility of short call, followed by a bear range, which includes a long option and a short option. This series of transactions, when diagramped, can be easily proven in the form of a rectangular, resulting in the name of the procedure spread.

Several factors can determine whether the box span for the investor is a feasible option. The state of arbitration plays a central role because the balance of results is directly affected. The proper shutters and calls will also have a big difference in the success of the strategy. For example, the choice to shorten the wrong call throws the entire equation out of the line and does not lead to a balance between the pure bonus and the current value in which they hoped.

It is possible to create two different variations of spreading the box. The long box span will include the use of four options, generally with the same underlying asset and the same terminal or payment date. This differs from the short span of the box, which usually includes two options. In both cases, the same basic combination of calls is used.