noun
straddle
An options strategy pairing a put and a call with the same strike price and expiration date.
She buys a straddle before the company's earnings report arrives.
Etymology
Straddle means to stand with a leg on each side. The options strategy places positions on both sides of the same strike price through a paired put and call.
More examples
- His straddle pairs a $50 call and a $50 put, both expiring Friday.
- A long straddle can profit from a large price move.
- Selling straddles exposes traders to substantial risk if prices swing.
Forms
straddle · straddles
Similar words
- strangle
- Pairs a put and call with different strike prices.