Long straddle
Buy the call and the put at the same strike. A bet on movement, indifferent to direction.
The view: Something is about to happen. No idea which way.
Construction
| Leg | Qty | Strike at 100 spot |
|---|---|---|
| Long call | 1 | 100 |
| Long put | 1 | 100 |
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- Max profit
- Unlimited
- Max loss
- -571
- Breakeven
- 94.29 / 105.71
- Net cash
- -571
When it fits
Ahead of a binary event — earnings, a ruling, a launch — where the size of the move matters more than its sign.
What goes wrong
- You are buying volatility that is already priced for the event, so the move has to beat expectations, not just happen.
- Implied volatility usually collapses the moment the news lands, which can lose money even on a correct call.
- Two premiums to recover means the breakevens are further out than they feel.
Try it properly
The chart above is the real pricing model, limited to three sliders. To change strikes, add legs, switch to futures, or price it against your own volatility assumption, open it in the options P&L calculator — the link under the chart carries this exact position across.
Education, not advice. Payoffs ignore commission, bid-ask spread, assignment risk and financing.