LEG OUT
One part of a complex option trade or investment strategy. It means to close out or unwind the leg of a derivative position. This is effective in eliminating any other possibility of a loss or a gain from the leg of that position. But if the original transaction has multiple legs, legging out of one transaction leg can still make the investor exposed to other legs of that trade. This is done to close the trade altogether. Examples of multi-legged trades are straddles, straps, strangles, and spreads.
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