Business and Personal Finance Dictionary

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• STRIP
  
  1. A Straddle (q.v.) plus another one of the Put Options. 2. A portfolio of similar options, but with different expiration dates and each with an underlying that depends on the expiration date. E.g., an Interest Rate Cap is a Strip of Call Options on LIBOR for consecutive, nonoverlapping accrual periods. 3. A cash flow at a single date, stripped from a note or bond. The Strip could be all or part of either a coupon payment or a principal payment.
  
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