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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

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.
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
However, some of these behaviors may serve other purposes in other contexts; this is especially true of straddling. When straddling occurs at the end of a chase, it is clearly an aggressive behavior (especially if the aggressor also bites the lizard it is straddling).
He would have won last month's US Open by a similar margin but for an opening 77 - in the end he was beaten only by Jordan Spieth (top), who these days is straddling golf like cocktail waitresses used to straddle Tiger Woods.
But Catherine Taylor, 46, admitted straddling another pupil who was "out of control".
Thomson of the University of California, Santa Barbara and his coworkers have produced sequences of micrographs that show an enzyme molecule straddling a strand of DNA and pulling it along to complete the beginning phase of protein manufacture.