Series 7 - General Securities Representative Exam

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A customer bought a Jan 40 call and sold a Feb 60 call. What kind of options trade is this?

Short Collar
A
Butterfly Spread
B
Diagonal Spread
C
Bertical Spread
D

Explanations

This is an example of a diagonal spread - when a customer buys an option in a monthly series and then sells another in a different monthly series at a different strike. This can be noted as a combination spread or a diagonal spread on the exam

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