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Bullish Patterns
Long Calls
Bull Call Spread
Bull Put Spread
Call Backspread
Long Call Ratio Spread
Naked Put
Synthetic Long Stock
The Collar
Covered Calls
Synthetic Long Call
Synthetic Short Put
Covered Straddle
Covered Strangle
Married Put
Protective Put

Bearish Patterns
Long Puts
Bear Put Spread
Bear Call Spread
Put Backspread
Long Put Ratio Spread
Naked Calls
Synthetic Short Stock
Synthetic Short Stock (split strikes)
Covered Put
Protective Call
Synthetic Short Call
Synthetic Long Put

Long Volatility
Long Straddle
Long Strangle
Short Call Butterfly
Short Put Butterfly
Short Iron Butterfly
Short Call Condor
Short Put Condor
Short Iron Condor
Long Guts
Strip
Strap
Short Call Ladder
Short Put Ladder
Long Call Synthetic Straddle
Long Put Synthetic Straddle

Short Volatility
Short Straddle
Short Strangle
Long Call Butterfly
Long Put Butterfly
Long Iron Butterfly
Long Call Condor
Long Put Condor
Long Iron Condor
Short Guts
Long Call Ladder
Long Put Ladder
Call Ratio Spread
Short Call Ratio Spread
Put Ratio Spread
Short Put Ratio Spread
Ratio Call Write
Ratio Put Write
Short Call Synthetic Straddle
Short Put Synthetic Straddle
Variable Ratio Write

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Strip

Risk: limited
Reward: unlimited

General Description
Entering a strip entails buying calls and buying twice as many puts at the same strike (same expiration date). It's similar to a long straddle and strap, but with the puts out-numbering calls, your bias is to the downside.

(draw a strip risk diagram here)

The Thinking
Your analysis tells you a big move is coming. You aren't sure of the direction, but you favor the downside. You enter a long straddle trade with an extra put in hopes of a move down. If you get the move you expect, you'll profit. If the stock moves up, that's fine too, but you'll need a pretty big move just to get back to breakeven.

Example
XYZ is at $50. Your analysis says a big move is coming, but you aren't sure of the direction, although you favor the downside. You buy (1) 50 call for $3.00 and (2) 50 puts for $2.75 each. The net debit is $8.50.

If the stock doesn’t move, all options expire worthless, and you incur a loss equal to the net debit paid to initiate the trade.

Above $50, the puts will expire worthless, and the call will increase in value point-for-point with the underlying. For example, at $65, the puts will be worthless ($2.75 loss per contract), and the call will be worth $15.00 ($12.00 profit). The net is a $6.50 profit.

Below $50, the call will expire worthless, and the puts will increase in value point-for-point with the underlying. For example, at $35, the call will be worthless ($3.00 loss), and the puts will be worth $15.00 ($12.00 profit per contract). The net is a $21.00 profit.

The PL chart below graphically shows where this trade will be profitable and at a loss.