Long straddle

Taking a long position in both a put and a call option.

Long Straddle

The act or state of having a long position in both a put option and a call option with the same underlying asset, strike price, and expiration date. An investor may take a long straddle when he/she believes that the market for the underlying asset will be volatile and will undergo dramatic price changes, but is unsure of which direction the changes will go. The long straddle allows the investor to profit regardless of which direction the underlying moves. It is also called a bullish straddle. See also: Straddle.

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Straddle

References in periodicals archive

On March 17, we bought a long straddle on the EWJ which is "at the money" purchase of both call & put option contracts.

Manufacturing in the KSA!

With long straddle, profits are earned irrespective of the markets 'fall or rise.

Long Straddle: This strategy involves buying a call and a put option with the same underlying security, expiry date and strike price.

Short Straddle: This strategy is the reverse of long straddle and is implemented by selling a call and a put option with the same underlying security, strike price and expiry date.

Rajesh purchases 6,450 RST Index options and enters the long straddle; Naveen sells 6,550 RST Index options and enters short straddle.

The long and short of straddle

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