|
|
Covered Straddle Write |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Covered Straddle WriteThe term used to describe the strategy in which an investor owns the underlying security and also writes a straddle on that security. This is not really a covered position.Covered Straddle Write Similar MatchesStraddleStraddlePurchase or sale of an equal number of puts and calls with the same terms at the same time. Related: Spread. StraddleStraddleThe simultaneous buying of a call and a put option or warrant in the same underlying instrument with the same expiry month and the same exercise price. This strategy is designed to benefit when a sharp price movement is expected but the direction is unknown. Covered straddleCovered straddleAn option strategy in which one call and one put with the same strike price and expiration are written against each 100 shares of the underlying stock. Example: writing 1 XYZ Sep 50 call and 1 XYZ Sep 50 put, and buying 100 shares of XYZ stock. In actuality, this is not a fully 'covered' strategy because assignment on the short put would require purchase of additional stock. Covered StraddleCovered StraddleAn option strategy in which one call and one put with the same strike price and expiration are written against 100 shares of the underlying stock. In actually, this is not a "covered" strategy because asignment on the short put would require purchase of stock on margin. This method is also know as a covered combination. Short straddleShort straddleA straddle involves both purchase and sale. In short straddle one put and one call are sold. Further SuggestionsTax straddleCalendar Straddle or Combination |
|
|
|