Vanilla Options—Strangle and Straddle Investment Strategies
As we have discussed earlier, vanilla (normal) options fill the requirement to have an investment strategy with limited loss and unlimited profit potential. There are a number of options strategies that investors across the globe use. In this chapter, we will discuss the straddle and strangle option strategies.
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. So the straddle and strangle strategies are not an investors view of a bullish or bearish market direction, but more a view on how less or more volatile the market is. To execute a long ...
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