Ladder (option combination)

In finance, a ladder, also known as a Christmas tree, is a combination of three options of the same type (all calls or all puts) at three different strike prices.

[1] A short ladder is the opposite position, in which one option is sold and the other two are bought.

These terms can be confusing, as they do not correspond to the usual concepts of "bullish" and "bearish" in finance.

For instance, a bear call ladder is in fact an overall bullish strategy.

[6][7][8][9] Because a ladder is a somewhat complex spread, it may not be listed directly on electronic exchanges, so traders wishing to trade one may need to make two or three transactions to construct the position, or communicate with a broker or market maker to specify the desired trade.