A combination strategy in which the same position is taken in the same number of puts as calls.
A straddle is a type of options strategy in which an investor holds a long position in both a call option and a put option with the same strike price and expiration date.
The call option gives the holder the right to buy a security at a certain price, while the put option gives the holder the right to sell a security at a certain price.
By holding both options, the investor is able to profit regardless of whether the underlying security’s price goes up or down.
Goal of Straddle
The goal of a straddle is to profit from a significant price movement in either direction of the underlying security, regardless of the direction of the movement.