Double spread vs Synthetic Spread

#1

To be sure i don’t have them mixed up. In regards to an upper, middle and bottom spread. With the Double, to Buy, you buy the upper and the lower. On the synthetic, you buy the upper’ sell the middle. Thanks

#2

double spread - buy upper buy lower (if upward bias)- or sell upper and sell lower (if downward bias) this is used to hedge the premium cost of a spread

synthetic - depends on if up or down bias this is used when there is no low risk spread near the floor or ceiling

sell lower buy middle (if downward bias) (only used when market is near bottom of middle spread)

buy upper - sell middle (if updward bias) (only used when market is near top of middle spread)

#3

Thanks, darrell