is created by combining a call option and a put option with the same time to maturity,but with the call strike price being greater than the put strike price.

A) a straddle
B) a strap
C) a strip
D) a strangle

Question

is created by combining a call option and a put option with the same time to maturity,but with the call strike price being greater than the put strike price.

A) a straddle
B) a strap
C) a strip
D) a strangle

Quizplus · Accepted Answer

This strategy tends to use out-of-the-money options,and so is somewhat cheaper to set up,though prices need to move further before either the call or the put is in-the-money.

Is Created by Combining a Call Option and a Put