DEFINITION of 'Neutral'

1) A term that describes an option on a security or market that is neither bullish nor bearish.

2) A term that describes a person who is non-biased in the case of a dispute, such as an arbitrator.


If an investor has a neutral opinion, that is, he or she feels a security or index will neither increase nor decrease in value in the near future, the investor can undertake an option strategy that may profit despite the lack of movement in the underlying security.

  1. Security

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  2. Ombudsman

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    A strategy undertaken by an investor or an investment manager ...
  4. Bear

    An investor who believes that a particular security or market ...
  5. Index

    A statistical measure of change in an economy or a securities ...
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    A method of managing risk in options trading by establishing ...
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