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

Florentino Nunez (left) is congratulated by Pedro Strop after scoring in the second inning.

Ems' opener good for nothing

Strop suffered a blown save in Friday's 6-5 victory over the San Diego Padres when he gave up a game-tying homer to pinch hitter Josh Naylor in the eighth inning.

Maddon still has 'lot of confidence' in Strop

Strop suffered a blown save in Friday's 6-5 victory over the Padres when he gave up a game-tying homer to pinch hitter Josh Naylor in the eighth inning.

Cubs' Maddon still has 'a lot of confidence' in Strop

The idea of some sort of Pedro Strop appreciation came to mind the other day, when Craig Kimbrel made his first appearance as the Cubs' new closer.

Strop has proved his worth over time

And then Ronaldo threw a strop when he was substituted, appearing to swear as he angrily snatched his tracksuit top and and took his seat in the dugout.

FERGIE'S STROP IDOLS

She threw a strop and demanded her own VIP area on the beach at St Tropez, when Diddy - formerly Puff Daddy and P Diddy - threw a party.

RADAR: DIVA STROPS!

Even before Chicago Cubs reliever Pedro Strop made his feelings known about the Cincinnati Reds' Yasiel Puig -- saying Puig was "stupid as (bleep)" for taking exception to being hit -- there were plenty of reasons to like and appreciate Strop.

Strop has proved his worth over six years with Cubs

But Jackie Reid and Burke are hugely unsympathetic towards him, as his strop throws his whole career into jeopardy.

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My mole said: "Courtney threw a right old strop. He shouted 'Can we get some music, now.

Radar: Dandy Warhols

Pedro Strop hit Puig on the thigh with a 3-0 fastball in the eighth inning.

Baez hits grand slam; Quintana gets win

The 70s singer threw a diva - style strop when producers refused to give him clean undies.

NO, I WON'T LET THE SHOW GO ON.. Pants row as Leo breaks out of BB

The Yellow crooner was dining out with fiancee Gwyneth Paltrow and her pal Stella McCartney when he threw his first `I'm a star' strop. Angry with a photographer's intrusion, Chris yelled, `I want my life back.

Strop idols: Ooh, get you!; Spoilt celebrities have never been averse to the odd temper tantrum, but who's top of the strops? We line up the worst offenders..