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

Which of the following definitions best describes 'straddle'?

A. 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
B. option trading strategy that uses options to limit the range of possible returns on a financial instrument
C. option trading strategy that involves a sequential set of options with periodic reset dates, such that each period between resets behaves like an individual option
D. 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

Answer: 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