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long leg

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Financial Dictionary

long leg

The side of an option spread (that is, one option bought long and one option sold short) that an investor is long. With a spread that involves owning a June 20 put and being short a March 20 put, the June 20 put represents the long leg. Compare short leg.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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