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 ?
Manet's realism equivocally straddled painting and photography, but finally, however indirectly, it tilted more to photography (that is, to its conventional 19th-century formulation as matter-of-fact, almost routine description), for it seemed to destroy or at least undermine the act of painting as such.
Though there still exists a significant and costly litigation matter between the company and its former chief executive officer, Doug Butcher, we are making significant strides in our operational performance, as well as in the resolution of many of the extraneous and costly non-operational issues with which the company has been straddled.
Taylor said the boy she straddled had been restrained by two members of staff.
Bode said he was unaware he had straddled the gate.