> For the complete documentation index, see [llms.txt](https://docs.ithacaprotocol.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ithacaprotocol.io/docs/ithaca-app/trading/dynamic-option-strategies/spreads.md). # Spreads ## **Call Spread**
A Call Spread Option Contract is a contract that gives the buyer (the owner or holder of the contract) the right to receive an amount in Strike Currency equal to the difference between the Reference Price and the Lower Strike Price of the Underlying Currency, if the Reference Price is above the Lower Strike Price and equal or below the Upper Strike Price. If the Reference Price is above the Upper Strike Price, the buyer has the right to receive an amount equal to the difference between the Upper Strike price and the Lower Strike Price. The contract seller has the corresponding obligation to pay the described amount upon exercise of the contract. \ Placing **Call Spread Orders** User goes long a lower strike call option and simultaneously goes short a higher strike call option. User pays premium to enter the trade and can think of the strategy as a risk vs reward strategy at the higher strike and beyond. User pays Premium and earns a multiple of the premium spent if underlying price at expiration greater than higher strike. ## **Put Spread**
A Put Spread Option Contract is a contract that gives the buyer (the owner or holder of the contract) the right to receive an amount of Strike Currency equal to the difference between the Upper Strike Price and the Reference Price of the Underlying Currency , if the Reference Price is below the Upper Strike Price and equal or above the Lower Strike Price. If the Reference Price is below the Lower Strike Price, the buyer has the right to receive an amount equal to the difference of the Upper Strike Price and the Lower Strike Price. The contract seller has the corresponding obligation to pay the described amount upon exercise of the contract. **Placing Put Spread Orders** User goes long a higher strike put option and simultaneously goes short a lower strike put option. User pays premium to enter the trade and can think of the strategy as a risk vs reward strategy at the lower strike and beyond. User pays Premium and earns a multiple of premium spent if underlying price at expiration lower than lower strike. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.ithacaprotocol.io/docs/ithaca-app/trading/dynamic-option-strategies/spreads.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.