Long Straddle

  • When? - When we expect the market will trending but the direction is not confirmed.
  • Strategy? - Buy a Call option and Put option of the same strike
  • Advantages? - Very effective in the tending market. Less capital required. Limited losses and unlimited profit.
  • Disadvantages? - Loss when the market is stuck.
  • Max Profit? - Unlimited
  • Max Loss? - Call Premium + Put Premium
  • Break-even point? - Lower = Put Strike - Put premium - Call premium; Upper = Call Strike + Call premium + Put Premium


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