strip

Variant of a straddle. A strip is two puts and one call on a stock. A strap is two calls and one put on a stock. The puts and calls have the same strike price and expiration date. See: Strap. Bloomberg Financial Dictionary

————

In the United Kingdom, it is a security issued in respect of future interest payments on UK Gilt-Edged securities. Euroclear Clearing and Settlement glossary

See gilts, gilt-edged security. Euroclear Clearing and Settlement glossary

Outside of the United Kingdom, it is an interest payment that has been split off the capital sum of a ( government) bond. Euroclear Clearing and Settlement glossary

————

For futures, buying ( selling) the strip involves the simultaneous purchase ( sale) of contracts of 4 or 6 consecutive delivery months in the same futures contract. For options, a stock option contract made up of 2 puts and one call. Exchange Handbook Glossary

* * *

▪ I. strip strip ¹ [strɪp] noun [countable] FINANCE

1. a security that has been created by separating a bond into the right to interest payments and the right to the repayment of the principal (= the original capital amount). For example, a 30-year bond would create 61 strips, 60 giving the right to receive interest payments every six months and one giving the right to have the capital repaid after 30 years:

• The principal strips yield 8.25% in 2009, and the interest strips mature in February and August of each year.

2. an option contract consisting of two put option S and one call option on the same shares and with the same price and date

  [m0] ▪ II. strip strip ² verb stripped _PTandPPX stripping _PRESPARTX [transitive] FINANCE

to separate a bond into strips:

• When a bond is stripped, its corpus, or principal due upon maturity, is sold separately without interest payments.

— see also asset-stripping, dividend-stripping

* * *

Ⅰ.

strip UK US /strɪp/ verb [T] (-pp-)

► FINANCE to remove the interest payments from a bond and sell them separately from the original bond: »

Certain of these securities may have variable interest rates and others may be stripped.

► (also strip sth down) to separate a machine or piece of equipment into separate parts in order to clean or repair it: »

Apprentices are taught how to strip and repair machinery.

→ See also ASSET-STRIPPING(Cf. ↑asset-stripping)

Ⅱ.

strip UK US /strɪp/ noun [C] (US COMMERCE

► a row of stores and small businesses built together along the side of a main road: »

commercial/retail strips

→ See also MAGNETIC STRIP(Cf. ↑magnetic strip)