combination option

Combination Option

A series of option contracts consisting of at least one call and one put with the same underlying asset. The combination option is written as a single unit but each of the component contracts may be resold on the secondary market separately. Each of the contracts has different strike prices and/or different expiration dates. Combination options exist in order to hedge one's investments. An investor may exercise either the call or the put, depending on the underlying price trends over the life of the contract, and still make a profit on the transaction. See also: Cliquet, Straddle, Strangle.

combination option

An option composed of one or more calls and one or more puts. While the original combination is sold as a single unit, each part may be sold or exercised individually. Examples of combination options are spreads, straddles, straps, and strips.
References in periodicals archive ?
Obviously, such combined classifiers will depend on the chosen combination option.
The minimum investment for the gold note and mutual fund combination option is $25,000 in the ADIB Capital Protected Gold Note, plus $5,000 in the mutual fund.
We would like cost estimates for five landline/cell-phone combination options.
Guests can then choose to mix in an assortment of fruit, candy, nuts or baked goods for other combination options.
Favorites include original recipes and authentic dishes, like Carne Asada Fries, Chile Rellenos, Authentic Tortas, freshly made tostadas and a “healthy dining menu” with multiple combination options.