Strap

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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.
References in classic literature ?
What else can a strapping chap of twenty-one mean with a fine wench of seventeen?
He nudged Philip when at some revue a woman appeared with practically nothing on, and pointed out to him the most strapping of the courtesans who walked about the hall.
I and these brethren were passing peacefully along the highroad with our pack horses, and a half score of men to guard them, when up comes a great strapping fellow full seven feet high, with fourscore or more men back of him, and calls upon me to stop--me, the Lord Bishop of Hereford, mark thou
Miss Matilda, a strapping hoyden of about fourteen, with a short frock and trousers, shrugged her shoulders and made a slight grimace, but took a candle and proceeded before me up the back stairs (a long, steep, double flight), and through a long, narrow passage, to a small but tolerably comfortable room.
In vain he protested against such treatment, until a strapping soldier struck him across the mouth and threatened to shoot him if he did not desist.
They were well built, strapping, painted fellows, their naked figures covered now by gorgeous robes against the chill of night.
If I was a fine, young, strapping chap like you, I should be ashamed of being milksop enough to pin myself to a woman's apron-strings
Kwaque, a strapping gang-boss, plucked Gogoomy from out of his following, and, helped by the other gang-bosses; twisted his arms behind him and snapped on the heavy handcuffs.
She was a strapping big woman, very hairy, and the thrashing she gave him was a delight to the horde.
Not that she was not a nice bit of a woman, healthy and strapping and good to look upon, also a very excellent dancer, but that she was a woman with all a woman's desire to rope him with her apron-strings and tie him hand and foot for the branding.
Not that they touched hands often, save at meeting and parting; but that in handling the bicycles, in strapping on the books of verse they carried into the hills, and in conning the pages of books side by side, there were opportunities for hand to stray against hand.
He was a strapping big German, with something wrong in his brain.