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 ?

iv) the positions are sold or marketed as offsetting positions (whether or not such positions are called a straddle, spread, butterfly, or any similar name),

Foreign currency straddles and transactions present complex tax issues

The bill amends section 1256(d)(4) defining mixed straddles to require identification of all positions constituting such straddle not later than the close of the day on which the first regulated futures contract forming part of the straddle is acquired.

Foreign currency strategies can produce unforeseen tax consequences

ownership of the stock certificates) is considered to be ownership of personal property for purposes of the tax straddle rules if such stock is of a type that is actively traded and at least one of the positions offsetting such stock is a position with respect to such stock or substantially similar or related property.

Part V: Straddles and other transactions

Long straddle reaches break-even points at 6,260 and 6,640.

The long and short of straddle

The longer ear requires milling on both sides, thus the difficult straddle milling operation.

Cooling a tough straddle milling job: saves auto parts maker $200K a year

Straddle is in Clyhore, Co Donegal and Chivers' station is 600 yards into Northern Ireland in Corry, Belleek, Co Fermanagh.

FUEL WAR LEADS TO 'SABOTAGE' AT STATION

Part of the tribe's reservation straddles the border between Arizona and Mexico.

Bishop urges citizenship for members of border tribe. (Nation)

5 kW motor; a built-in 10-amp automatic battery charger; a floor locking foot brake, and adjustable straddle legs and forks.

Power-lift stacker suited for light-duty applications. (New Products & Services)

Thus, basing the decision to sell a straddle on a comparison of seemingly irrational high implied volatilities with much lower expected volatility could itself be an irrational choice.

The Risks and Rewards of Selling Volatility

But in this 20th anniversary year, with close to 2,000 delegates expected, the registration fee in four figures, and Canada loudly being proclaimed as the second-largest exporter of TV programming in the world, the straddle has turned into a major gymnastic manoeuvre.

20th Banff Television Festival: "excellence" vs. "the market"

These were Supplant, Trail, Straddle, Chase, Face-Off, Arched Back Display and Straddle-Bite.

Aggressive behaviors of lizards of the parthenogenetic Cnemidophorus laredoensis complex (Sauria: Teiidae) in southern Texas

Hydraulic straddle hoists have long been a fixture in boatyards and marinas, where they raise craft from and lower them into the water for repair and launching.