Compare Strategies
LONG STRADDLE | LONG STRADDLE | |
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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 |
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 .. |
LONG STRADDLE Vs LONG STRADDLE - Details
LONG STRADDLE | LONG STRADDLE | |
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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 | 2 |
Strategy Level | Beginners | Beginners |
Reward Profile | Unlimited | Unlimited |
Risk Profile | Limited | Limited |
Breakeven Point | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium |
LONG STRADDLE Vs LONG STRADDLE - When & How to use ?
LONG STRADDLE | LONG STRADDLE | |
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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. | 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. |
Action | Buy Call Option, Buy Put Option | Buy Call Option, Buy Put Option |
Breakeven Point | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium | Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call + Net Premium |
LONG STRADDLE Vs LONG STRADDLE - Risk & Reward
LONG STRADDLE | LONG STRADDLE | |
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Maximum Profit Scenario | Max profit is achieved when at one option is exercised. | Max profit is achieved when at one option is exercised. |
Maximum Loss Scenario | Maximum Loss = Net Premium Paid | Maximum Loss = Net Premium Paid |
Risk | Limited | Limited |
Reward | Unlimited | Unlimited |
LONG STRADDLE Vs LONG STRADDLE - Strategy Pros & Cons
LONG STRADDLE | LONG STRADDLE | |
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Similar Strategies | Bear Put Spread | Bear Put 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. | • 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. |
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. | • Unlimited potential beyond the breakeven point in either direction . • Book your profit from highly volatile stocks without determining the direction. • Limited risk, more profit. |