Level 4 – Ultimate Option Trading Guide to Layer Spread (Random Walker Spread)

What is Layer Spread?

“One plus one plus one would equal five” is what a Layer Spread  is trying to accomplish. Though pretty much any group of strategies can be combined to create a Layer Spreads, the typical building blocks are butterflies, condors, iron-condors, vertical spreads, and naked options.

A Layer Spread is a strategy where the totality of the positions results in a final position that is greater than the sum of its parts. Its primary objective is to create a position that makes money throughout an entire range of likely stock closing prices.

Instead of all the pieces of the spread being executed as close to the same moment as possible, the Random Walker will usually have positions (layers) added over many days.