straddle
- The buying of an equivalent quantity of both put and call options for the same underlying securities having the same price and expiration date
- Investors use a straddle strategy to hedge their investments, buying the same number of put and call options for a given security.
- The straddle strategy gives the buyer the right to buy or sell the underlying security at a specific price before the option expires.
- Using a straddle can provide a level of protection for investors in highly volatile markets.
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