combination, straddle, strap, strip, strangle

A combination is an option trading strategy that involves taking a position in both calls and puts on the same stock. We will consider straddles, strips, straps, and strangles.

One popular combination is a straddle, which involves buying a European call and put with the same strike price and expiration date.

straddle

A strip consists of a long position in one European call and two European puts with the same strike price and expiration date.

A strap consists of a long position in two European calls and one European put with the same strike price and expiration date.

strap and strip

In a strangle, sometimes called a bottom vertical combination, an investor buys a European put and a European call with the same expiration date and different strike prices.

strangle

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