Long Straddle
This is an option buying strategy where in the trader or a buyer selects to go for a long call along with long put. Both of these options have the same underlying security along with having same strike price and expiration date. Strike price usually stays at the current market price of the underlying or somewhat at the money.
This trading strategy puts a bet on volatility. Profits or returns are generated when the price of the underlying security either goes up or moves down from the current market price level. In case the movements are not significant, the options fail to generate food returns and are thus worthless during the time of expiration.
Tags: Long Straddle, options buying strategy, Strike price
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