An option strategy in which you hold a long position in both a put and a call option with the same strike price is called:
A)a strangle.
B)portfolio insurance.
C)a butterfly spread.
D)a straddle.

Question

Quizplus · Accepted Answer

A strategy in which you hold a long position in both a put and a call option with the same strike price is called a straddle. A strangle involves the same strategy, but with different strike prices for the put and call options. Portfolio insurance refers to a strategy used to protect against losses in a portfolio of investments, whereas a butterfly spread involves holding multiple positions in options with differing strike prices.

An Option Strategy in Which You Hold a Long Position