The inverse of a spread is called reverse spread

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An investor believes that there will be a big jump in a stock price, but is uncertain as to the direction. Identify six different strategies (spreads or combinations) the investor can follow and explain the differences among them.

Hint: You should also consider the inverse of a spread or combination that we have studied. For example, the inverse of a spread is called a reverse spread. Relative to a spread, the reverse spread involves 1) a short position where the spread would be a long position and 2) a long position where the spread would be a short position.

Reference no: EM131070706

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