Long straddle

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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On March 17, we bought a long straddle on the EWJ which is "at the money" purchase of both call & put option contracts.
Long straddle provides opportunities for unlimited rewards and limited risk, whereas short straddle offers limited rewards and unlimited risk.
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.
The long straddle position will reward them if the price moves substantially either up or down.
The long straddle is created by buying a call option and a put option with the same strike price; usually, at the money.