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Separate Trading of Registered Interest and Principal Securities (STRIPS)

Long-term notes and bonds divided into principal and interest-paying components, which may be transferred and sold in amounts as small as $1000. STRIPS are sold at auction at a minimum par amount, varying for each issue. The amount is an arithmetic function of the issue's interest rate.

Separate Trading of Registered Interest and Principal of Securities

Also called STRIPS, a Treasury security whose coupons have been separated from the principal. STRIPS therefore pay no interest. They are sold at a significant discount from par and mature at par. STRIPS fluctuate in price, sometimes dramatically, because changes in interest rates made them more or less desirable. STRIPS could be invested IRAs and other pension accounts; however, unlike other Treasury securities, they are subject to federal taxes. STRIPS are quoted according to their yields rather than their prices. They began to be issued in 1985, rendering obsolete similar securities, such as CATS, which behaved similarly. See also: zero-coupon bond.


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.



STRIPS, an acronym for separate trading of registered interest and principal of securities, are special issues of US Treasury zero-coupon bonds. They're created and sold by brokerage firms, not by the government.

The bonds are prestripped, which means that the issue is separated into the principal and a series of individual interest payments, and each of those parts is offered separately as a zero-coupon security.

References in periodicals archive ?
Working from left to right only under the second-layer strips, insert the needle under the first strip, over the second and third strip, under the fourth strip, over the fifth and sixth strip, under the seventh strip, over the eighth and ninth strip and under the tenth strip.
Alternating the sewing direction as the strip sets are sewn together helps keep them straight (Join the first strip set to the second by sewing from top to bottom; join the third strip set to the first two by sewing from the bottom to the top.
Starflex strip and mica strip also used in molds, platens and dies.
For Better or For Worse: Lynn Johnston's family-friendly strip stirred up controversy in 1992 when Lawrence, a good friend of her protagonist family's then-teenage son, came out to his parents.
To braid: Bring the strip from the right side across the center strip and under the left strip, catching it between the index and ring fingers of the left hand.
One effect of this is to put the oldest and most recent strips on the same plane, to let one jump easily from the '7os to today and back.
Regardless of how the container has been stored or handled, test strips have a firm shelf life, beyond which their results may be inaccurate.
Aaron McGruder is taking the comic strip industry by storm
By adding two more cartoonists and gearing the strip toward women's themes, Kennedy came up with an idea that he could pitch to newspaper editors, and, with the six-for-the-price-of-one format, a unique method of delivery.
It is estimated that rumble strips can reduce the rate of ROR accidents between 20 and 50 percent.
If anyone is going to find any defendant guilty," The Washington Post scolded after a series of merciless strips on Watergate, "it's going to be the due process of justice, not a comic strip artist.
At the same time the strips with which we decorate our cubicles allow us to express a bit of our own take on life, to tattoo a piece of our mind to the grey flannel canvas of corporate or institutional life.