Hedge Wrapper

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Hedge wrapper

An options strategy in which an investor with a long position in an underlying stock buys an out-of-the-money put and sells an out-of-the-money call. The hedge wrapper defines a range where the stock will be sold at expiration of the option, whichever way the stock moves.

Hedge Wrapper

An option strategy in which an investor who owns the underlying asset buys an out of the money call and sells an out of the money put. The hedge wrapper sets a limit on the loss and gain one can realized from the price movements of the underlying asset; if it moves too far in one direction or the other one of the options will be exercised.

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