Contributed by: Ralph Windsor
Leg refers to a component of an option strategy, most often one or more contracts involving buying or selling a call or put.
With option strategies that are composites (e.g. an Iron Condor
which is a Credit Spread
comprising a Bull Put Spread
and a Bear Call Spread
) it can also refer to one of the components taken as a whole (i.e. both Long
sides) rather than being broken down further.
See Leg In
and Leg Out
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