Task: Class Definition Understanding (ontology: Business_Finance/Financial_Industry_Business_Ontology)

Which of the following definitions best describes 'strangle'?

A. option trading strategy that uses options to limit the range of possible returns on a financial instrument
B. option trading strategy that consists of being short (selling) an out of the money put and being long (i.e., buying) an out of the money call, both with the same maturity
C. neutral option trading strategy that involves simultaneously buying both a put option and a call option for the underlying security with the same strike price and the same expiration date
D. option trading strategy in which the investor holds a position in both a call and a put option with different strike prices, but with the same expiration date and underlying asset

Answer: option trading strategy in which the investor holds a position in both a call and a put option with different strike prices, but with the same expiration date and underlying asset