Series 7: 5.3.1.1. Combinations

Taken from our Series 7 Online Guide

5.3.1.1. Combinations

A combination is similar to a straddle, in that an investor purchases or sells both a call and a put on the same stock; however, those options will have different strike prices and/or different expiration dates. For example, a position that includes each of the following options would be a combination:

Long 10 ABC May 40 calls @ 5

Long 10 ABC May 35 puts @ 4

The following would also be a combination:

Short 5 XYZ June 30 calls @ 3

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