Strip (strip)

Zero-coupon bond created so that – claims to certain cash flows from a security on the one hand and – the principal amount of the security on the other can be traded separately; strip is the abbreviation here for separate trading of interest and principal. – Option strategy consisting of – two puts and one call – on the same underlying and – with the same strike price and expiration date. – See butterfly spread, option, strangle, strap.

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