Compare Strategies
LONG STRADDLE | IRON CONDORS | |
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About Strategy |
Long Straddle Option StrategyStraddle is neither bullish nor bearish strategy; it is a market neutral strategy. Here a trader wishes to take advantage of the volatility in the market. This strategy involves buying of one Call option and one Put option of the same strike price, same expiry date and of the same underlying asset. Now a trader is bound to make profits once stock moves in either direc |
Iron Condors Option StrategyIron Condor is a neutral trading strategy. A trader tries to make profit from low volatility in the price of the underlying asset. This strategy will be better understood if you recall ‘Bull Put Spread’ & ‘Bear Call Spread’. A trader will buy one Deep OTM Put Option and sell one OTM Put Option,. He will also sell one OTM Call Option and buy one Deep OTM Call Option. .. |
LONG STRADDLE Vs IRON CONDORS - Details
LONG STRADDLE | IRON CONDORS | |
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Market View | Neutral | Neutral |
Type (CE/PE) | CE (Call Option) + PE (Put Option) | CE (Call Option) + PE (Put Option) |
Number Of Positions | 2 | 4 |
Strategy Level | Beginners | Advance |
Reward Profile | Unlimited | Limited |
Risk Profile | Limited | Limited |
Breakeven Point | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium | Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received |
LONG STRADDLE Vs IRON CONDORS - When & How to use ?
LONG STRADDLE | IRON CONDORS | |
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Market View | Neutral | Neutral |
When to use? | This options strategy is work well when and investor market view is bearish. The strategy minimizes your risk in the event of prime movements going against your expectations. | When a trader tries to make profit from low volatility in the price of the underlying asset. |
Action | Buy Call Option, Buy Put Option | Sell 1 OTM Put, Buy 1 OTM Put (Lower Strike), Sell 1 OTM Call, Buy 1 OTM Call (Higher Strike) |
Breakeven Point | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium | Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received |
LONG STRADDLE Vs IRON CONDORS - Risk & Reward
LONG STRADDLE | IRON CONDORS | |
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Maximum Profit Scenario | Max profit is achieved when at one option is exercised. | Net Premium Received - Commissions Paid |
Maximum Loss Scenario | Maximum Loss = Net Premium Paid | Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid |
Risk | Limited | Limited |
Reward | Unlimited | Limited |
LONG STRADDLE Vs IRON CONDORS - Strategy Pros & Cons
LONG STRADDLE | IRON CONDORS | |
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Similar Strategies | Bear Put Spread | Long Put Butterfly, Neutral Calendar Spread |
Disadvantage | • There should be continuous movement of the stock and options price for this strategy to be profitable. • Time decay hurts long option if the strike price, expiration date or underlying stock are badly chosen. | • Full of risk. • Unlimited maximum loss. |
Advantages | • Unlimited potential beyond the breakeven point in either direction . • Book your profit from highly volatile stocks without determining the direction. • Limited risk, more profit. | • Chance to gather double premium. • Sure, maximum gains on one-half the trade. • Flexible and double leverage at half price. |