An Option Trader Will Acquire a Long Straddle If the Trader

question 101

True/False

An option trader will acquire a long straddle if the trader expects a share price to become much more volatile than the market expects.

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Definitions:

Treasury Bills

Government-issued securities with maturity of up to a year, offered below their nominal value.

Collection Time

The duration it takes for a business to receive payments owed by its customers after a sale has been made.

Collection Float

The time delay between when a check is written and when the funds are actually deducted from the payer's account.

Treasury Bills

Short-term government securities issued at a discount from their face value and maturing at par.