straddle Hear it!

straddle definition - finance
A trading strategy that involves the simultaneous purchase and sale of options. A long straddle is the simultaneous purchase of a put and a call. A short straddle is the sale of a put and a call. A straddle is used by a speculator who thinks that asset prices will move significantly in one direction or another. However, if an investor expects prices to remain stable, he can sell a straddle.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.