CHAPTER 7
Option Strangle and Straddle Strategies
As we have discussed earlier, options fill the requirement to have a trading strategy with limited loss and unlimited profit potential. There are a number of options strategies that traders across the globe use. In this chapter we will discuss the straddle and strangle strategy in options.
Long Straddle
The long straddle option strategy is used when you expect big movements in the price of the underlying asset but are unsure as to the exact direction of the price movement. To execute a long straddle you buy a call and a put with identical strike prices and identical expiry times. With this strategy, as long as the price at expiry is far enough away to ensure a profit on one of the options that ...
Get Mastering Options now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
