Talk:Box spread

Comments

A question for the box savvy.

Does the box option protect and hedge a spread?

EG : A commodity has a spread of 20 between April/Dec. Can a box option be constructed around the spread to protect the 20?

Could someone who understands the subject matter please review the Example? Based on the first table, I think the initial investment cost of the box should be $28.70 (the sum of all the individual options). Since the payoff of the box is $20.00, that would suggest an arbitrage opportunity on a LOSS of $8.70 rather than on a gain of $0.30 - reversing the box? — Preceding unsigned comment added by 2A02:8084:6021:E700:FDB4:E3B8:1CEA:935C (talk) 20:37, 26 March 2025 (UTC)[reply]

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