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Covered Straddle

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Dictionary Says

Definition of 'Covered Straddle'

An option strategy that involves writing the same number of puts and calls with the same expiration and strike price on a stock owned by the investor. A covered straddle is a bullish strategy.
Investopedia Says

Investopedia explains 'Covered Straddle'

The covered straddle strategy is not a fully "covered" one, since only the call option position is covered. The put write position is "naked", or uncovered, which means that if assigned, it would require the option writer to buy the stock at the strike price. While gains with the covered straddle strategy are limited, large losses can result if the underlying stock tumbles to levels well below the strike price at option expiration. If the stock does not move between the date that the positions are entered and expiration, the investor collects the premiums and realizes a small gain.

Directory (Option Strategy)

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    Alligator Spread

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  10. Box Spread

  11. Bull Call Spread

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  17. Calendar Spread

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  19. Collar

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  21. Condor Spread

  22. Contingent Order

  23. Conversion Arbitrage

  24. Covered Call

  25. Covered Combination

  26. Covered Straddle

  27. Credit Spread

  28. Death Put

  29. Debit Spread

  30. Delta Hedging

  31. Delta Neutral

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  35. Double One-Touch Option

  36. Fence (Options)

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  38. Fixed Dollar Value Collar

  39. FMAN

  40. Forex Hedge

  41. Forex Option & Currency Trading Options

  42. Form 6781: Gains And Losses From Section ...

  43. Front Fee

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  47. Implied Volatility - IV

  48. Interest Rate Collar

  49. Iron Butterfly

  50. Iron Condor

  51. Leg

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  53. Long Jelly Roll

  54. Long Leg

  55. Long Put

  56. Long Straddle

  57. Long-Term Equity Anticipation Securities ...

  58. Married Put

  59. Modidor

  60. Multi Index Option

  61. Multi-Leg Options Order

  62. Naked Call

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  64. Negative Butterfly

  65. Net Option Premium

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  75. Put Ratio Backspread

  76. Ratio Call Write

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  79. Reverse Conversion

  80. Risk Reversal

  81. Roll Down

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  84. Seagull Option

  85. Sell To Open

  86. Series 4

  87. Short Leg

  88. Short Straddle

  89. Straddle

  90. Strangle

  91. Swing Option

  92. Synthetic Dividend

  93. Variable Ratio Write

  94. VIX Option

  95. Writing An Option

  96. Zero Cost Collar

  97. Zomma

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