- 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 glossaryOutside 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] FINANCE1. 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] FINANCEto 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.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: »
Financial and business terms. 2012.