Strap
Definition
A relatively simple trading strategy that involves buying a set of options, two calls and one put, with the same strike price and expiration date on a stock. The strap is a more focused version of the straddle, and is popular due to its unlimited profit, limited risk nature. The maximum loss that a strap can incur occurs when the equity price on the expiration date of the options is the same as the price on the date the options were purchased. In this case, the loss is equal to the sum the three-option set was purchased for. However, with any deviation in the price either up or down, the strategy recovers at least some of the cost of purchasing the options. See: Strip, Straddle
Investing Essentials
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Getting Started In Stocks
Investopedia
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The NASDAQ Dozen
Learning Markets
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The 10 Commandments Of Investing
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The Lowdown On Penny Stocks
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10 Things To consider Before Selecting An Online Broker
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Start Investing With Only $1,000
Investopedia
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University
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Market check
An investigation typically conducted by an investment banking firm, on behalf of a target's Board of Directors (or Special Committee) as part of a process to determine whether a proposed price for... Read More
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