Variable Ratio Write

Definition:

An option strategy in which the investor owns 100 shares of the underlying security and writes two call options against it, each option having a different striking price.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Bundling, unbundling

Creation of securities either by combining primitive and derivative securities into one composite hybrid or by separating returns on an asset into classes.

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