A box spread is an arbitrage strategy which involves opening a combination of a debit call vertical and a debit put vertical with the same strike prices and expiration dates. These two positions cancel each other out synthetically (logically) But this is done deliberately so as to keep the original position open and to use the new position as a lock, which means to close a position synthetically by opening a logically inverse position. Since a box spread would be used as a lock, the idea of using one would be because the other half of it already did well and so the lock is used to secure a profit. Therefore, a box spread would generally start with one of two of these and then add the other. However, sometimes a box spread is opened outright in rare conditions where mispricing are found that would create an advantage despite slippage from transaction costs and the bid/ask spread.

• Bull Call Spread: This involves buying a call option at a specific strike price while selling another call option at a higher strike price, both with the same expiration date.
• Debit Put Vertical: This involves buying a put option at a specific strike price while selling another put option at a lower strike price, again both with the same expiration date.