Q-14.3. True or false: both a CHOOSER and a STRAP are long volatility | Financial Risk Manager Part 1 Quiz - LeetQuiz
Financial Risk Manager Part 1
Explanation:
True. Both structures benefit from a large move in the underlying asset price.
A chooser is long volatility because the holder can later select the more valuable option type.
A strap is also long volatility because it is structured to profit more when the underlying makes a large move, especially upward but generally from large price movement in either direction.
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Q-14.3. True or false: both a CHOOSER and a STRAP are long volatility