What is a Long Straddle?
A Long Straddle means you buy both a call option AND a put option at the same ATM strike simultaneously. You don't care about direction — you need the stock to move BIG in either direction. If it rallies hard, the Call profits. If it crashes, the Put profits. You only lose if the stock barely moves.
Infosys is at ₹1,500 before quarterly results. You have no idea whether results will beat or disappoint — but you know Infosys MOVES on results, either 5% up or 5% down. You buy the 1,500 CE for ₹40 AND the 1,500 PE for ₹38. Total cost: ₹78 × 300 = ₹23,400. Results come in — Infosys beats estimates massively. Stock jumps to ₹1,700. Your Call pays ₹200 − ₹40 = ₹160 profit. Net P&L: (₹160 − ₹38) × 300 = ₹36,600. A 156% return.
Like betting a coin flip will be EITHER heads-by-a-lot OR tails-by-a-lot — not just a slight lean either way. You win from extreme results in either direction. You lose only if the outcome is frustratingly mild and the market goes nowhere.
At a Glance
Max Profit
Unlimited — rises with move in either direction
Max Loss
Total premium paid (both options)
Breakeven
Strike ± Total Premium
Type
Debit · Defined Risk
| Action | Type | Strike | Expiry | Qty |
|---|---|---|---|---|
| Buy | Call (CE) | ATM Strike | 30–45 DTE | 1 Lot |
| Buy | Put (PE) | Same ATM Strike | Same expiry | 1 Lot |
P&L Simulator
Long Straddle
📊 Long Straddle — Payoff Chart + P&L Calculator
Index / Stock Price: 22000 · Call Premium Paid: 130 · Put Premium Paid: 130 · Lot Size: 75 · Price at Exit: 22700
Understanding the Greeks
- Delta (near zero): Direction-neutral at entry. Only the SIZE of the move matters.
- Theta (very negative): Both options decay daily. Every quiet day is a double loss. You need the stock to move fast.
- Vega (very positive): IV spikes before events make both options more valuable — even before the stock moves. Buy when IV is low.
- Gamma (very positive): Fast, large moves in either direction compound your profits dramatically.
When Should You Use This Strategy?
✓ When to Use / ✕ When to Avoid / ◉ IV / ◷ DTE
3 use items · 3 avoid items
⊞ Trade Table
0 legs · 3 scenarios
