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TeachMeFinance.com - explain Straddle historic definition... Straddle -- A straddle is like a spread a double privilege, a put and a call combined, but only one price is named in it. The stock may be called (called for) or put (delivered) at tfrs price. The stock must go up or down more than the amount paid for the straddle before there is a profit in it. Illustration : A stock is selling at 100 and a straddle on 100 shares is bought at this price, for vvhich 5 per cent ($500) is paid. The stock, therefore, must go above 105 or below 95 before there is a profit to the purchaser of the straddle. If a dividend becomes due on a stock during the pendency of a straddle on it the dividend goes to the holder of the straddle if he elects to receive and pay for the stock, but it goes to the seller of the straddle if the stock is put (delivered) to him. A dividend always goes with the stock. For additional information see Privilege. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2007 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.