Christmas Tree Spread

Asymmetric multi-strike spread with directional bias

What is Christmas Tree Spread?

Christmas Tree Spread A variation of a butterfly or ladder spread using three different strikes where the intervals between strikes are unequal. Typically involves buying one option at the nearest strike, selling options at two middle strikes, and buying at the furthest strike. The asymmetric structure creates a directional bias while keeping risk defined.

Complete Definition

A variation of a butterfly or ladder spread using three different strikes where the intervals between strikes are unequal. Typically involves buying one option at the nearest strike, selling options at two middle strikes, and buying at the furthest strike. The asymmetric structure creates a directional bias while keeping risk defined.