Strip

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Strip

Variant of a straddle. A strip is two puts and one call on a stock. A strap is two calls and one put on a stock. The puts and calls have the same strike price and expiration date. See: Strap.

Strip

A bearish investment strategy in which an investor holds two puts and one call on the same underlying asset with the same expiration date and strike price. An investor uses a strip when he/she believes that the price of the underlying will decrease substantially. If it does, the investor stands to make a substantial profit by exercising the puts. On the other hand, if the underlying increases in price, the investor will not suffer a substantial loss because the strike price of the call protects him/her. See also: Call backspread ratio, Strap.

strip

A combination of two put options and a call option. The buyer of a strip profits from large variations in the price of the underlying asset, especially if it is moving downward.
References in periodicals archive ?
4 : to take away all duties, honors, or special rights <The soldiers were stripped of their rank.
After the mold is stripped from the pattern equipment, it must be finished for closure and pouring.
Whether enduring another losing Little League season with his misfit team, suffering Lucy's endless betrayal with the football, or missing yet another chance to speak to the curly-haired girl of his dreams, the decent little boy with the curl right in the middle of his forehead shows us who we are, stripped of our illusions or pretensions.