An option strategy involving concurrent transactions that places an investor on both sides of the market in order to benefit from any possible move in the price of a stock. The strategy is executed by selling a call option and a covered put option, both out-of-the-money with the same expiration date for which the seller receives cash premiums from each. A covered put sale requires that the stock of the underlying security be held in an account; however, the premium will lower the cost basis of owning the stock.
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An option strategy that involves the simultaneous sale of an out-of-the-money call and a put with the same expiration date on a security owned by the investor.
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