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Leg

1. Term describing an order entry technique used by brokers. A leg occurs when a broker executes contingent orders in separate phases, thus increasing the risk for price swings through time delays.

2. A description of different aspects in a combination option.

Notes:

1. An example is when a broker attempts to execute an option straddle order as two separate transactions. The possibility for profit and loss occurs though the fluctuating price of the options.

Sometimes referred to as a leg plant.

2. A straddle has two legs, one put and one call.

See also: Broker, Call, Combination, Contingent Order, Option, Put, Straddle

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Leg

A prolonged trend in stock market prices, such as a multiple-period bull market; or, an option that is one side of a spread transaction. See: Lifting a leg.

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leg

One side of a combination option. See also leg lifting, leg on, long leg, short leg.