Strips and straps are variations of ________.
A) straddles
B) collars
C) money spreads
D) time spreads

Question

Quizplus · Accepted Answer

Strips and straps are variations of straddles in options trading. A strip consists of a long position in one call and two puts with the same strike price and expiration dates, while a strap involves a long position in two calls and one put, also with the same strike price and expiration dates. Both strategies are used when a trader believes there will be a significant price movement but is uncertain of the direction.

Strips and Straps Are Variations of ________