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Separate Trading of Registered Interest and Principal Securities (STRIPS)

Long-term notes and bonds divided into principal and interest-paying components, which may be transferred and sold in amounts as small as $1000. STRIPS are sold at auction at a minimum par amount, varying for each issue. The amount is an arithmetic function of the issue's interest rate.

Separate Trading of Registered Interest and Principal of Securities

Also called STRIPS, a Treasury security whose coupons have been separated from the principal. STRIPS therefore pay no interest. They are sold at a significant discount from par and mature at par. STRIPS fluctuate in price, sometimes dramatically, because changes in interest rates made them more or less desirable. STRIPS could be invested IRAs and other pension accounts; however, unlike other Treasury securities, they are subject to federal taxes. STRIPS are quoted according to their yields rather than their prices. They began to be issued in 1985, rendering obsolete similar securities, such as CATS, which behaved similarly. See also: zero-coupon bond.


A bearish investment strategy in which an investor holds two puts and one call on the same underlying asset with the same expiration date and strike price. An investor uses a strip when he/she believes that the price of the underlying will decrease substantially. If it does, the investor stands to make a substantial profit by exercising the puts. On the other hand, if the underlying increases in price, the investor will not suffer a substantial loss because the strike price of the call protects him/her. See also: Call backspread ratio, Strap.



STRIPS, an acronym for separate trading of registered interest and principal of securities, are special issues of US Treasury zero-coupon bonds. They're created and sold by brokerage firms, not by the government.

The bonds are prestripped, which means that the issue is separated into the principal and a series of individual interest payments, and each of those parts is offered separately as a zero-coupon security.

References in periodicals archive ?
Analysis of the SMBG Market for Strips and Meters in the Retail Segment 48
The top side edge of the second sheet strip has an elastic member extending in the longitudinal direction and bonded in a stretched state.
Toyo specified a cooler/ stacker to process both soft and hard compounds, and with the flexibility to stack endless sheet, cut sheets or strips.
Complete line of heaters includes mica bands and strips, mineral insulated bands, ceramic bands and strips, extruded aluminum bands and strips, coiled heaters, and flexible and cartridge heaters.
In the new work, a carbon-nanotube strip about the length of a matchstick is laden with platinum particles.
When Brooke McEldowney, author of the elegant, erudite comic strip "9 Chickweed Lane," moved his lead character, Edda, out of her mother's titular address and into the city with a ballet company late last year, he simply decided that her new roommate and dance partner--barrel-chested, dirty-blond Seth--should be gay.
Quick-drying all-purpose glue to attach the rubber strips onto your urn.
While newspapers steadily reduced the sizes of the strips in their funny pages, Trudeau alone was able to insist that his cartoon stay unshrunk.
The east, public strip has a long wall of glass which looks out over a green bank sprinkled with young trees; the grass comes down to the very bottom of the glass, and almost seems to come into the building.
The idea that nose strips might make it easier to breathe has been tossed around for a long time without much evidence.
At the National Association of Black Journalists convention in Chicago in 1997, McGruder met an executive from Universal Press Syndicate and presented the strips that had run in The Source, a hip-hop entertainment publication, and his college newspaper, The Diamondback, from the University of Maryland in College Park.
Others didn't work with regular characters, and some didn't want to have to produce a completed strip every day.