Spread (equity)

Also called: option spread, gain spread

In one line

The gap between a share's current value and your strike price — the per-share gain built into an option.

In plain English

Spread is simply value minus strike. It's your paper profit per share, the figure behind both your potential proceeds and the taxable bargain element when you exercise.

If you were explaining it to a 5-year-old

The toy is worth 10 coins; your voucher cost 1. The 9-coin gap is the spread — how much you're ahead.

Why it matters when you sell

Your total spread (per share times shares) is the rough size of your gain and your tax event, so it frames any decision to exercise and sell.

Put it to use

Are my options worth anything?

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Sources

A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.

Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.

Spread (equity)

Related terms

Put it to use