n]
| 1. | the act of combining or the state of being combined. |
| 2. | a number of things combined: a combination of ideas. |
| 3. | something formed by combining: A chord is a combination of notes. |
| 4. | an alliance of persons or parties: a combination in restraint of trade. |
| 5. | the set or series of numbers or letters used in setting the mechanism of a combination lock. |
| 6. | the parts of the mechanism operated by this. |
| 7. | Often, combinations. a suit of underwear in one piece. |
| 8. | Mathematics.
|

Combination
When an investor holds a position in both call and put options on the same asset.
Investopedia Commentary
There are various types of combination spreads, including straddles and strangles.
Related Links
Options Basics Tutorial
combination
Case Study Lucas Industries PLC and Variety Corporation, two manufacturers of auto and truck brakes, agreed in June 1996 to a combination to be called Lucas-Variety PLC. Managements of both firms indicated the combination was necessary so as to remain competitive in a market that demanded a global presence. The combination also was expected to produce cost savings and to result in tax savings by allowing the new firm to benefit from Lucas's tax-loss carryforwards. Terms of the agreement called for the two firms to merge into a new company through an exchange of shares. Variety's owners would receive approximately 38% of the shares of the new firm while Lucas's owners would receive the other 62% of the shares. The market prices of both firms' shares rose following announcement of the agreement, an indication that investors agreed with managements' assessment of the financial benefits of the merger. |
combination
1.
The number of combinations of r objects chosen from a set of n is
n C r = n! / ((n-r)! r!)
where "n C r" is normally with n and r as subscripts or as n above r in parentheses.
See also permutation.
2.
(1995-04-10)