Search a symbol to visualize the potential profit and loss for a strip option strategy.
What is a strip?
Similar to a straddle, but with a more bearish bias by buying double the amount of puts. The stock must move to make a profit, but it will now make more if it moves down than if it moves up.
Time works against this strategy as it will decay. Increasing volatility will be helpful in pushing the stock in a direction, as well as increasing the value of your position as implied volatility rises.
- Buy a call at strike A
- Buy two puts at strike A