A package of OPTIONS created to provide unique RISK MANAGEMENT investment, or speculative results that cannot be achieved through simple positions. Common compound strategies include BULL SPREADS, BEAR SPREADS, STRADDLES, STRANGLES, and TIME SPREADS. See also DIRECTIONAL STRATEGY, SPREAD, VOLATILITY STRATEGY.

More On This Topic

Link to This Definition
Did you find this definition of COMPOUND OPTION STRATEGY helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary