FINRA Series 7

Category - Series 7

Which of the following options positions is characteristic of a short straddle?
  1. long one put and short one call
  2. long one call and short one put
  3. long one call and long one put
Explanation
Answer: C - long one put and short one call. This is a short straddle. A position that is long one put and long one call is a long straddle.
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