straddle definition

straddle

Options combining strategy in which one call and one put option—both with the same strike price and expiration date--on the same underlying asset are either purchased (called 'long straddle') or sold (called 'short straddle'). Although this combinations of options is exercised usually as a unit, each option may be exercised separately. Its payoff depends on the changes in the volatility of the underlying asset's price.

straddle is in the Commodities & Precious Metals Trading, Currency Trading, Disaster Planning & Risk Management, Investing and Securities & Futures Trading subjects.

straddle appears in the definition of the following term: strangle

straddle appears in these other terms: bull straddle, long straddle, short straddle, bear straddle

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