(redirected from straddles)
Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia.


Purchase or sale of an equal number of puts and calls with the same terms at the same time. Related: Spread.


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.


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.


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.


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 ?
1092-6T initially applied to all identified mixed straddles established after Aug.
Short straddle reaches its break-even points at 6,365 and 6,735.
A straddle is an advanced trading strategy that involves holding long and short positions (such as buying both a put and call option) that essentially offset one another.
Some straddles are pertinent to the phrase of which they form a part:
Someone comparing the implied volatility with the simple measure of historical volatility might often be tempted to sell straddles.
The behavioral interactions involved one or both lizards exhibiting at least one of the following seven behaviors: supplant, trail, straddle, chase, face-off, arched back display or straddle-bite (Table 1).
GainsKeeper FundTaxPro applies both of the distinct loss deferral rules for straddles and then tracks positions in future periods.
The difficult junction between old and new is managed by making a big steel portal that provides the main axial roof support of the new; it straddles the old, welcoming its north end under the generous roof.
Previously, investors used straddles to create immediate deductible tax losses without a current economic loss.
Notices 2002-50, 2003-54 and 2002-65 straddle tax shelters: These transactions use tiered passthough entities to claim deductions for noneconomic losses on foreign currency straddles.
The nine-story Cable Building, which straddles the NoHo and SoHo border, at the corner of Broadway and Houston Streets, was built in 1893 and designed by the noted architect Stanford White.
A 151-unit complex that straddles the 7200 blocks of De Soto and Kelvin avenues in Canoga Park was sold for $5.