Long Straddle Strategy
High VolatilityIntermediateVolatility Strategy
Buy calls and puts at the same strike to profit from large price movements in either direction.
How It Works
1
Buy ATM Call: Purchase a call option at the current stock price (at-the-money).
2
Buy ATM Put: Purchase a put option at the same strike price as the call.
3
Profit from Movement: Make money if stock moves significantly above or below the strike price.
Key Metrics
Max Profit:Unlimited (stock can move infinitely)
Max Loss:Total Premium Paid (Call + Put)
Upper Breakeven:Strike + Total Premium Paid
Lower Breakeven:Strike - Total Premium Paid
Best Case:Large movement in either direction