Strap

A relatively simple trading strategy that involves buying a set of options, two calls and one put, with the same strike price and expiration date on a stock. The strap is a more focused version of the straddle, and is popular due to its unlimited profit, limited risk nature. The maximum loss that a strap can incur occurs when the equity price on the expiration date of the options is the same as the price on the date the options were purchased. In this case, the loss is equal to the sum the three-option set was purchased for. However, with any deviation in the price either up or down, the strategy recovers at least some of the cost of purchasing the options. See: Strip, Straddle

Strap

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

strap

A combination option made up of two calls and one put. The buyer of a strap profits from large variations in the price of the underlying asset, especially if it moves upward.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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References in periodicals archive

Strapping processes can be pre-programmed and automatically adjusted to specific requirements.

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Glyn Halgarth, Stock Manager at T H Clements commented: "We are pleased with the performance of the strapping machine.

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[ClickPress, Fri May 04 2018] The global plastic strapping market is expected to grow at a CAGR of around 6.6% from 2017 to 2025, according to Progressive Markets report, Plastic Strapping Market Size, Trend, Share, Opportunity Analysis & Forecast, 2017-2022.

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Mosca, renowned for its expertise in the manufacture of end-of-line strapping solutions, has developed a range of IP56 rated stainless steel strappers ideal for use in food environments where washdown is required.

Mosca introduces stainless style

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A new improved version of Cyklop's ES600a automatic pallet strapping system, launched in 2004 and quickly established as a market leader, is now exclusively available in the UK from Cambridgeshire-based Cyklop.

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Strapex, one of the world's leading suppliers of end of line strapping equipment, has further extended its acclaimed SMG range of vertical strapping equipment with two new additions.

Two new vertical strapping machines