A straddle is a combination of a put and call on:
A)the same stock, with the same strike price and expiration date.
B)different stocks, with the same strike price and expiration date.
C)different stocks, with different strike price and expirations dates.
D)the same stock, with the same the strike price and different expiration dates.

Question

Quizplus · Accepted Answer

A straddle is a combination of a put and call on the same stock with the same strike price and expiration date. It is used to play wide fluctuations in stock prices and is usually applied to individual stocks with high betas and a history of large, short-term fluctuations in price.

A Straddle Is a Combination of a Put and Call