Long Straddle
A strategy of trading options whereby the trader will purchase a long call and a long put with the same underlying asset, expiration date and strike price. The strike price will usually be at the money or near the current market price of the underlying security. Investopedia Says:
The strategy is a bet on increased volatility in the future as profits from this strategy are maximized if the underlying security moves up or down from present levels. Should the underylying security's price move a small amount, (or not at all), the options will be worthless at expiration. Related Terms:
Iron Butterfly
Iron Condor
Short Straddle
Straddle
Strangle |