STATISTICALLY SUCCESSFUL OPTIONS STRATEGIES -- PART II
THE LONG STRADDLE
The long straddle is a defined risk options strategy that assumes that the price of the underlying will move outside a specified range in the lifespan of the trade. It can be directional or neutral in bias, and consists of buying a long call and a long put at the same strike price. If the price of the underlying does not exceed the BE on either the call or put side upon expiry, the maximum loss is realized.
Example: AAPL Sept 4 125 Long Straddle
POP: 43%
Max Profit: Unlimited
Max Loss: $578
BE's: 119.22/130.78
The long straddle is a defined risk options strategy that assumes that the price of the underlying will move outside a specified range in the lifespan of the trade. It can be directional or neutral in bias, and consists of buying a long call and a long put at the same strike price. If the price of the underlying does not exceed the BE on either the call or put side upon expiry, the maximum loss is realized.
Example: AAPL Sept 4 125 Long Straddle
POP: 43%
Max Profit: Unlimited
Max Loss: $578
BE's: 119.22/130.78
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