Box Spread

A box spread is an options trading strategy combining a bull call spread and a bear put spread. The bull call spread involves buying a call option at a lower strike price and selling one at a higher strike price. The bear put spread entails buying a put at a higher strike price and selling one at a lower strike price, all on the same underlying asset with identical expiration dates. This creates a low-risk arbitrage opportunity, as the payoff is typically fixed, exploiting pricing inefficiencies between the options while balancing the spreads.