Long Straddle
Buy Call and Put at same strike
Positions in Chart: Buy 1 lot of 25800 CE + 1 lot of 25800 PE. Spot price: 25800
Setup
Buy ATM Call + Buy ATM Put (same strike)
When to Use
- Expect large price movement but unsure of direction
Market Outlook
Volatility Expectation↗Expected to Rise Sharply
Price DirectionLarge Move Expected Either Direction
Risk & Reward
Breakeven PointStrike ± Total Premium Paid
Max Contract LossTotal Premium Paid
Max Position LossSame as Max Contract Loss
Strategy Details
Complexity LevelAdvanced
DirectionBig move in any direction
VolatilityEventful
Number of Legs2 Leg
Strategy TypeDebit
Hedging CapabilityMinor Hedging
Description
A long straddle involves buying both a call and put option at the same strike price and expiration. This strategy profits from large price movements in either direction
Example
If NIFTY is at ₹25,800, you buy a ₹25,800 Call for ₹120 and a ₹25,800 Put for ₹110, paying ₹230 total. You profit if NIFTY moves below ₹25,570 or above ₹26,030.
This information is for educational purposes only and should not be considered as financial advice. Always consult with a qualified financial advisor before making investment decisions. Data is constructed and is not actual. Calculations may have errors.
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