# What is this option strategy called?

Suppose, I want to do following in a single order, what will be the name of the strategy

1. Buy 100 shares of XYZ at \$50
2. Sell 1 Call on XYZ for strike price of \$55
3. Sell 1 Put on XYZ for strike price of \$45

As an alternative, I can buy shares in one order and then later use second order to do 2&3 together. But I want to do all three actions in single order, so I can get best price.

I searched but could not find one.

Suppose, I want to do following in a single order, what will be the name of the strategy?

Buy 100 shares of XYZ at \$50 Sell 1 Call on XYZ for strike price of \$55 Sell 1 Put on XYZ for strike price of \$45

There is no name for your strategy because you are combining the same strategy twice except that it is occurring at different strikes and once with the natural and once with the synthetic. So what does that mean?

A covered call is equivalent to a short put (Google the Synthetic Triangle for details).

If you buy 100 shares of XYZ at \$50 and sell 1 XYZ \$55 call then you are effectively selling the \$55 put. Add the other leg and that means that you are selling a \$45 put and a \$55 put. If you prefer to look at it the other way, you are selling a covered call at \$45 and selling another covered call at \$55. You're doubling up but at different strikes.

Though it's not what you asked, the closest strategy to what you asked would be:

• Buy 100 shares of XYZ at \$50
• Sell 1 Call on XYZ for strike price of \$55
• Buy 1 Put on XYZ for strike price of \$45

This position is called collared long stock. It can be executed in a single transaction if your broker offers this combo order. This one happens to be synthetically equivalent to a vertical spread.

Clear as mud? :->)