Strangle

(redirected from choke)
Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia, Wikipedia.
Related to choke: Choke valve

Strangle

Buying or selling an out-of-the-money put option and call option on the same underlying instrument, with the same expiration. Profits are made only if there is a drastic change in the underlying instrument's price.

Strangle Strategy

An option strategy in which one buys two out-of-the-money options (usually one call and one put) on the same asset at different strike prices. One profits from a strangle position when there is a large price movement on the underlying asset, regardless of the direction. This is because one of the options will become in the money, so long as the price moves in one direction or the other. Loss only occurs if the price of the underlying asset remains largely the same.

Strangle.

A strangle is a hedging strategy in which you buy or sell a put and a call option on the same underlying instrument with the same expiration date but at different strike prices that are equally out-of-the-money.

That is, the strike price for a put is above the current market price of the stock, stock index, or other product, and the strike price for a call is below the market price.

If you buy a strangle, you hope for a large price move in one direction or another that would allow you to sell one of the contracts at a significant profit. If you sell a strangle, you hope there's no significant price move in either direction so that the contracts expire out-of-the-money and you keep the premium you received.

References in periodicals archive ?
Toke N' Choke Dispensary is the first web series about life in a dispensary.
Operation Choke Point Accuser Speaks Out :A Wisconsin gun shop owner describes how his account was closed by his credit union.
The original choke tubes were not included with mine.
Q I noticed that in your series on rebuilding a Remington Model 11 the shotgun has a Poly Choke.
Responding to these concerns, St John Ambulance has launched its new campaign, including a star-studded animated advert that teaches everyone what to do if a baby starts to choke.
St John Ambulance has launched a campaign that includes an animated advert showing what to do if an infant starts to choke.
There is simply no reason for a child to choke to death in school," Lih said.
How do you choke if you have somebody sitting right next to you, helping you eat?
She also made the mistake of saying the load patterned tightest from the Urika's Modified choke.
The NSSF, in late May, issued a statement on "Operation Choke Point," indicating the trade association had "heard from several industry members that they had banking relationships terminated by their lending institutions," as a result of the FDIC program.
Of course, the efficacy of a shotgun load is largely dependent on pairing it up with the right choke tube.
624 constriction, the choke had the ability to hold payloads of No.