straddle
noun [ C ]
FINANCE, STOCK MARKET uk/ˈstrædl/ us(also strangle)a situation in which an investor buys or sells both a call option (= agreement to buy shares at a fixed price before or on a fixed date) and a put option (= agreement to sell shares at an agreed price before or on a particular date):
There is a lower level of initial margin on straddle positions because the daily price movements are likely to be lower than in the individual contracts.
long straddle
a situation in which an investor buys both a call option and a put option on the same shares because they think that there will be a big change in the share price but they do not know if it will go up or down
short straddle
a situation in which an investor sells both a call option and a put option on the same shares because they think that the share price will probably stay the same