Straddle


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Straddle

Purchase or sale of an equal number of puts and calls with the same terms at the same time. Related: Spread.

Straddle

The strategy in which one has the same position in both a put option and a call option with the same underlying asset, strike price, and expiration date. An investor may have a straddle when he/she believes that the market for the underlying asset will be volatile and will undergo dramatic price changes, but is unsure of which direction the changes will go. A straddle allows the investor to profit regardless of which direction the underlying moves, provided there is a significant movement. A small price change in either direction will result in a loss. See also: Long Straddle, Short Straddle.

straddle

1. In futures, the purchase of a contract for delivery in one month and sale of a contract for delivery in a different month on the same commodity.
2. In options, the purchase or sale of both a call and a put, generally with the same strike price and expiration date. The buyer of a straddle benefits from large price fluctuations in the underlying asset, while the seller of a straddle, who collects the premiums, benefits from small price changes in the underlying asset.

Straddle.

A straddle is hedging strategy that involves buying or selling a put and a call option on the same underlying instrument at the same strike price and with the same expiration date.

If you buy a straddle, you expect the price of the underlying to move significantly, but you're not sure whether it will go up or down. If you sell a straddle, you hope that the underlying price remains stable at the strike price.

Your risk in buying a straddle is limited to the premium you pay. As a seller, your risk is much higher because, if the price of the underlying security moves significantly, you may be assigned at exercise to purchase or sell the underlying security at a potential loss.

Similarly, if you choose to buy off-setting contracts when the prices move, it may cost you more than the premium you collected.

Straddle

A straddle is any set of offsetting positions on personal property. One example, is a put and call option on the same number of shares of a particular security, with the same exercise price and expiration date.
References in periodicals archive ?
275-4(b)(9)(vi) contemplates that a contingent payment debt instrument may be a position in a straddle such that the issuer will treat a positive adjustment as a loss with respect to such straddle.
Long straddle reaches break-even points at 6,260 and 6,640.
The market size of the Straddle Carrier is more than 500 units per year.
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Motorist Martin Keaney told how he went to Straddle Service Station on August 5, 2002, where he bought EUR20 worth of diesel and, on returning after a trip to Co Donegal, he and his wife stopped at Chivers' station.
A straddle consists of a call and put option of the same strike price and maturity so that the strike price is equal to (or very close to) the current price of the underlying asset.
The behavioral interactions involved one or both lizards exhibiting at least one of the following seven behaviors: supplant, trail, straddle, chase, face-off, arched back display or straddle-bite (Table 1).
Briefly recapping what we've already learned, the long straddle is the simultaneous purchase of an equal number of at- or near-the-money puts and calls on an underlying stock, with the same strike and same expiration date.
Cargotec has received a major order to deliver 44 automated straddle carriers (AutoStradA) and related automation technology to Asciano's Container Terminal at Port Botany in Sydney, Australia.
Conversion of positions in legacy currencies to the euro may inadvertently create a straddle transaction to which the loss deferral rules of Sec.
One interesting trading strategy that we haven't covered in this column is the short straddle.
Under the plan to expand, the company will develop the recently leased Knuckle capacity extension, which also incorporates new terminal handling technology, cranes and straddle carriers.