8.2 Three Alternative Strategies Take a position in the option and the underlying 2 or more options of the same type This is known as a spread a mixture of calls and puts This is known as a combination Options, Futures, and Other Derivatives, 4th edition@ 2000 by John C. Hull Tang Yincai, C 2003, Shanghai Normal UniversityOptions, Futures, and Other Derivatives, 4th edition © 2000 by John C. Hull Tang Yincai, © 2003, Shanghai Normal University 8.2 Three Alternative Strategies • Take a position in: – the option and the underlying – 2 or more options of the same type • This is known as a spread – a mixture of calls and puts • This is known as a combination