Long Straddle Option Strategy: Explanation and Tactics

What is the Long Straddle Strategy, and how can you use this strategy to profit from the crypto options market?

What is Long Straddle Options Strategy?

If you are sure a crypto asset will greatly respond to a piece of news or information, or you have other reasons to believe there will be a substantial change in an asset’s price, you can use the long straddle options strategy. This strategy is simple and does not streamline the asset’s price to one direction for profits to be made.

Long Straddle Option Strategy

How Long Straddle Options Strategy Work?

There are a few criteria that give the straddle meaning. Some of the key points include:

1. Outlook

There must be a certainty of a gap up or down, likely through the breakout of major news. 

2. Strategy

After ascertaining the certainty of the market movement, the next thing is to buy both a call and put option. The major criteria include the following:

1. They must be of the same asset

2. They must have the same strike price

3. They must expire on the same day.

3. Maximum loss\risk

The most you can lose from trading long straddle options strategy is the premium paid for both contracts. This happens when both contracts expire out of money.

4. Profit

Theoretically, the potential for profits from this strategy is limitless, especially when the asset’s price goes up. 

5. Breakeven price expiration

Since there are two main options, the breakeven price can either be one of two prices. 

● Lower Breakeven = Put Strike Price – Net Premium

● Upper breakeven = Call Strike Price + Net Premium

6. Payoff diagram

Below is a diagram that shows the profit and loss potential of the long-straddle strategy.

Advantages of Long Straddle

1. The losses are capped. 

2. The break-even prices are closer than many other strategies. 

Drawbacks of Long Straddle

1. The premium paid differs, and one might need a stronger directional movement to profit from one of them. 

FAQ:

What is the difference between long and short straddles?

The Long straddle comes with limited risk and unlimited rewards; the short straddle, on the other hand, is the direct opposite, with limited rewards and potential for unlimited loss.

What is a Straddle Example?

Here is an example that explains the execution of a long straddle and the eventual strategy payoff Images like this can be seen on the Deribit or Redot options page. At the time of this writing, Bitcoin is trading at $19,200. A trader can buy a call option at $19,500 for $318, and a put option at the same strike price for $134.98.

The breakeven price is:

1. Lower breakeven: $19,500 - $452.98 = $19,047

2. Upper breakeven: $19,500 + $452.98 = $19,958.98

Scenario 1 – Market expires at $19,047 (lower breakeven)

No gain or loss: Profit made equals premium paid. 

Scenario 2: Market expires at $19,958 (upper breakeven)

Like the first scenario, the options trader is neither in profits nor losses. Profit made equals premium paid. 

Scenario 3: Market expires at $19,500

If the market expires at the stroke price, the trader loses both premiums paid for the call and put options. 

Scenario 4: The market ends at $18,500

The call option expires worthless but the put option expires in the money. The trader makes a profit of $547.

Scenario 5: The market ends at $21,000

The put option expires worthless, and the call option expires in the money. The trader makes a $1,041 profit. 

How Do You Earn a Profit in a Straddle?

You earn a profit when the asset moves past your breakeven point in either direction.

Conclusion:

We sincerely hope that you learned something from this blog and that you will make the most of it in real life.

/fa-youtube/ Latest Tech Videos!

Name

25PP,2,3G,3,4G,5,Absinthe,5,Adobe Flash,3,Ads,27,Affiliate Marketing,10,AliExpress,1,Amazon,54,Amazon Phone,1,Amazon Tablet,7,AMD,5,Android,255,Android 10,2,Android 11,2,Android 12,2,Android 6,3,Android 7,4,Android 8,9,Android 9,4,Android APK,34,Android Apps,126,Android Auto,3,Android Games,20,Android GApps,3,Android Gingerbread,2,Android Ice Cream Sandwich,8,Android Jelly Bean,21,Android KitKat,12,Android Lollipop,10,Android Marshmallow,3,Android N,5,Android Nougat‬,5,Android O,7,Android Oreo,8,Android P,2,Android PC Suites,1,Android Pie,3,Android Q,2,Android R,2,Android SDK,9,Android TV,11,Android USB Drivers,2,Android Wear,10,Angry Birds,6,Anti Virus,18,App Developer,60,Apple,781,Apple CarPlay,1,Apple Pay,3,Apple Store,19,Apple TV,119,Apple Watch,84,Apps,145,ARM,2,Asus,2,ATT,7,Baidu,2,Battery,2,Bill Gates,2,Bing,16,Bitcoin,55,Bittorrent,5,BlackBerry,11,BlackBerry App,3,Blockchain,25,Blogger,52,Blogs,85,Bluetooh,7,Business,685,BuySellAds,1,Call Center,7,Camera,8,Cars,25,CCTV,1,Certifications,22,China Mobile,3,Chrome,26,Chrome OS,6,ChromeBook,2,ChromeBox,2,Chromium,4,CISPA,1,Cloud,44,CMS,6,Communication,21,Computer,79,Cortana,1,Credit Cards,10,CRM,15,Cryptocurrency,70,Currency,61,Cyberbullying,7,Cydia,47,Cydia Apps,11,Cydia Tweaks,11,Debit Cards,7,Developers,90,Digital Camera,9,Digital Marketing,419,Digital Signage,5,Disqus,1,DMCA,1,Doodle,1,DOS,1,Downgrade,17,Dropbox,1,Drupal,3,Earn Money,80,EarPods,2,eCommerce,57,Electra,6,Electronic Arts,1,Emulator,8,Encryption,2,Entrepreneurs,110,eReader,4,eSignature,2,Ethereum,24,Evasi0n,16,eWallet,9,Facebook,138,Facebook Ads,13,Facebook Apps,19,Facebook Credits,4,Facebook Developers,4,Facebook Like,8,Facebook Marketing,14,Facebook Messenger,5,Facebook Pages,9,Facebook Photos,2,Facebook Stocks,2,FacePAD,1,FaceTime,2,FileSonic,2,Finance,152,Firefox Add-Ons,2,Firefox OS,2,Fitbit,1,Foursquare,1,FP,21,Framaroot,4,Free Stuff,27,Gadgets,223,Galaxy Nexus,2,Galaxy S-Voice,2,Game of Thrones,1,Games,81,Gaming Console,12,Gaming Laptops,15,GApps,2,GearBest,6,Gifts,6,Gmail,13,Google,253,Google +1,10,Google Ads,5,Google Adsense,3,Google Adwords,6,Google Analytics,3,Google Apps,11,Google Earth,2,Google Fit,2,Google Glass,8,Google IO Conference,4,Google Map,7,Google Music,2,Google Nexus,13,Google Nexus Player,1,Google Panda,1,Google Penguins,1,Google Play Edition,1,Google Play Store,18,Google Plus,17,Google Plus Pages,6,Google Search,45,Google TV,5,Google Voice,6,Google Wallet,1,Google+,16,Google+ App,1,Google+ Pages,6,Graphic Design,14,GreenPois0n,28,Groupon,6,GSM,3,Guest Posts,10,h3lix,2,Hack,96,Hackintosh,4,Hard Disk,14,Hard Drive,17,HDD,16,Headsets,9,HealthVault,1,Home Automation,15,Honor,1,Hootsuite,1,Hostgator,2,Hotspot Shield,1,HP,2,HTC,16,HTC One,6,HTML5,16,HTTPS,3,Huawei,4,Huawei Honor,3,Hyper-V,4,IBM,2,iCloud,31,iGoogle,2,iMac,10,Infographic,211,Instagram,25,Intel,8,Internet,562,Internet Explorer,18,Internet IPOs,1,Internet Marketing,221,Internet Protocols,4,iOS,486,iOS 10,21,iOS 11,28,iOS 12,32,iOS 13,20,iOS 14,26,iOS 15,19,iOS 16,4,iOS 4,1,iOS 5,17,iOS 5.0.1,5,iOS 5.1,9,iOS 5.1.1,12,iOS 5.2,1,iOS 5.2.1,1,iOS 6,73,iOS 6.0.1,13,iOS 6.0.2,5,iOS 6.1,21,iOS 6.1.1,3,iOS 6.1.2,4,iOS 6.1.3,7,iOS 6.1.4,4,iOS 6.1.5,2,iOS 6.1.6,2,iOS 7,58,iOS 7.0.1,2,iOS 7.0.2,2,iOS 7.0.3,1,iOS 7.0.4,2,iOS 7.0.5,1,iOS 7.0.6,5,iOS 7.1,25,iOS 7.1.1,6,iOS 7.1.2,6,iOS 8,60,iOS 8.0.1,5,iOS 8.0.2,5,iOS 8.1,12,iOS 8.1.1,2,iOS 8.1.2,1,iOS 8.1.3,1,iOS 8.2,6,iOS 8.3,5,iOS 8.4,10,iOS 8.4.1,4,iOS 9,33,iOS 9.0.1,1,iOS 9.0.2,1,iOS 9.1,6,iOS 9.2,2,iOS 9.2.1,2,iOS 9.3,3,iOS 9.3.1,2,iOS 9.3.2,4,iOS 9.3.3,4,iOS 9.3.4,2,iOS 9.3.5,2,iOS Apps,94,iOS Beta,29,iOS Games,19,IP,3,iPad,448,iPad 2,54,iPad 3,47,iPad 3G,1,iPad 4,9,iPad Air,4,iPad Apps,32,iPad Mini,29,iPad Mini 2,2,iPad Siri,4,iPadOS,69,iPhone,511,iPhone 3G,51,iPhone 3GS,6,iPhone 4,62,iPhone 4S,66,iPhone 5,32,iPhone 5C,4,iPhone 5S,14,iPhone 6,31,iPhone 6 Plus,9,iPhone 7,2,iPhone Apps,32,iPhone Siri,7,IPO,3,iPod,413,iPod Apps,18,IPv4,1,IPv5,1,IPv6,1,iShower,1,iShower Speaker,1,IT,2,iTunes,197,Jailbreak,135,Jailbreak Tools,43,Jitterbug Touch,1,Joomla,5,Kaspersky,1,Keyboards,3,Keylogger,2,Kindle,9,Kindle Fire,3,Kingo,2,KingRoot,1,Laptop,77,Lasers,1,Launchers,3,Lava,1,LCD,2,Legal,5,Lenovo,2,Lenovo ThinkPad,1,LG,9,LiberiOS,2,Lightning Cables,1,Link Building,4,LinkedIn,4,Linux,13,Lockerz,1,Logitech,1,Lync Desk Phones,1,Mac,250,Mac Mini,4,Mac OS X,202,MacBook,11,MacBook Air,17,MacBook Pro,17,Macintosh,8,macOS,115,macOS 10.12,9,macOS 10.13,9,macOS 10.14,8,macOS 10.15,9,macOS 11,21,macOS 12,11,macOS 13,3,macOS Beta,6,macOS Big Sur,21,macOS Catalina,9,macOS High Sierra,9,macOS Mojave,8,macOS Monterey,11,macOS Server,3,macOS Sierra,9,macOS Ventura,3,Magento,5,Mambo,3,Maps,9,Mark Zuckerberg,2,Marketing,165,Marketplace,3,Meego,2,Megaupload,1,Meizu,1,Micromax,1,Microsoft,212,Microsoft Office,43,Microsoft SharePoint,1,Microsoft Surface,3,Microsoft Surface Pro,2,MIUI,3,Mobile,773,Mobile App Developers,50,Mobile Apps,221,Mobile Broadband,2,Mobile OS,32,Mortgage,1,Moto X,1,Motorola,6,Mouse,3,Movies,1,Mozilla Firefox,16,Music,19,MySpace,2,Nasdaq,1,Net Meeting,1,Nexus,7,NFC,1,Nikon,1,Nintendo,4,Nintendo 3DS,3,Nokia,31,Nokia Belle,2,Nokia Lumia,8,Nokia Normandy,1,Nokia Store,2,Nokia X,6,Notebook,1,Nuance,1,Office 2010,9,Office 2013,3,Office 2016,13,Office 2021,1,Office 365,12,OnePlus,1,Open Graph,1,Open Source,1,Opensn0w,1,Opera,6,Opera Mini,2,Operating System,114,Oppo,1,Oracle,3,Orkut,1,OS,47,OS X 10.10,65,OS X 10.10.1,6,OS X 10.10.2,9,OS X 10.10.3,10,OS X 10.10.4,6,OS X 10.10.5,4,OS X 10.11,25,OS X 10.11.1,3,OS X 10.11.2,2,OS X 10.11.3,2,OS X 10.11.4,2,OS X 10.11.5,3,OS X 10.11.6,2,OS X 10.8,2,OS X 10.9,37,OS X 10.9.1,2,OS X 10.9.2,5,OS X 10.9.3,12,OS X 10.9.4,7,OS X 10.9.5,5,OS X El Capitan,23,OS X Mavericks,40,OS X Mountain Lion,17,OS X SDK,9,OS X Server,48,OS X Server 3,5,OS X Server 4,15,OS X Server 5,9,OS X Yosemite,60,Outlook,13,Ovi,2,Ovi Store,1,P0sixspwn,1,P2P,1,PageRank,2,Pangu,11,Payments,34,Payoneer,2,PayPal,4,PDF,8,Personalization,1,PhotoBox,1,Photography,10,Picnik,1,Pinterest,2,PIPA,2,Piracy,3,PlayStation,6,PlayStation 4,4,Pocophone,2,Pod2g,2,Podcasts,2,Powerpoint,4,PP,2,Printers,11,Privacy,164,Programming,51,Projectors,3,PS4,4,PUBG,1,Python,2,QMobile,1,QMobile Noir,1,RAM,2,Redsn0w,23,Remote Access,9,Root Android,37,Rovio Mobile,4,S-Voice,2,Safari,46,Samsung,58,Samsung Galaxy,30,Schemer,1,Search Engine,83,Search Engine Marketing,81,Search Engine Results,56,Seas0nPass,2,Secure Socket Layer,3,Security,192,Selfie,1,SEM,85,SEO,153,SEO Tools,16,SERP,2,Server,18,Shopping,107,Signage,3,Sileo,2,SIM Card,2,Siri,12,SkyDrive,3,Skype,5,SlideShare,1,Small Business,522,Smart TV,6,Smart Watch,9,Smartphones,716,SMM,11,SMO,16,Sn0wbreeze,5,SnapChat,4,Social Media,151,Social Media Marketing,111,Social Media Optimization,73,Social Media Tools,12,Social Networking,200,Software,396,Sony,19,Sony Ericsson,5,Sony VAIO,1,Sony Xperia,3,SOPA,2,Speakers,3,Sprint,2,Spyware,4,SSD,16,SSL,2,Startups,370,Statistics,23,Stock,3,Stock Photography,5,Stock Photos,5,Storage,26,Store,55,Swift,12,Swype,1,Symbian,8,T-Mobile,4,Tablets,601,TaiG,5,TechGlobeX,3,TechGlobeX.net,1,Technology,343,Telephone,1,Television,10,Templates,6,TinyUmbrella,2,Tools,250,Torrent,4,Toshiba,2,Toshiba Satellite,1,TuneUp Utilities,1,TV,14,tvOS,68,Twitter,20,TypePad,3,Ubuntu,6,Ultrasn0w,1,Unlock,43,USB Debugging,2,uTorrent,5,Verizon,4,Video Marketing,19,Video Optimization,23,Videos,58,Vimeo,1,Virtualization,13,Virus,10,Visual Studio,3,Vlogging,3,Vlogs,3,Vodafone,2,Voice Call,21,VoIP,16,VPN,29,Wallpapers,1,Walmart,2,watchOS,80,Wearables,17,Web,258,Web Browser,30,Web Browser Plugins,5,Web Design,46,Web Development,81,Web Domains,16,Web Hosting,37,Web Servers,22,Western Digital,1,WhatsApp,7,Whited00r,1,WiFi,7,WiFi Calling,5,WiFi Hotspots,6,Windows,173,Windows 10,22,Windows 10 Enterprise,2,Windows 10 Mobile,1,Windows 10 Pro,2,Windows 10 Server,3,Windows 11,3,Windows 11 Enterprise,1,Windows 7,33,Windows 8,48,Windows 8 Pro,3,Windows 8 RT,3,Windows 8.1,6,Windows 8.1 Enterprise,1,Windows 9,4,Windows Apps,4,Windows Live,3,Windows Live Essentials,5,Windows Live Messenger,6,Windows Media Center,1,Windows Mobile,19,Windows Phone,47,Windows Phone 10,1,Windows Phone 7,10,Windows Phone 7.5,5,Windows Phone 8,9,Windows Phone 8.1,1,Windows Phone Apps,1,Windows Phone Mango,3,Windows Phone SDK,1,Windows Server,7,Windows Server 2012,2,Windows Server 2016,2,Windows Server 2019,1,Windows Server 2022,1,Windows Server 8,1,Windows Vista,5,Windows XP,6,Wireless,4,Wordpress,53,Wordpress Plugins,6,Wordpress Themes,9,WWDC,71,Xbox,6,Xbox 360,6,Xbox One,3,Xcode,84,Xiaomi,8,Yahoo,15,Yalu,3,YouTube,18,Zong,1,ZTE,1,Zune,2,Zynga,1,
ltr
item
TechGlobeX: Long Straddle Option Strategy: Explanation and Tactics
Long Straddle Option Strategy: Explanation and Tactics
What is the Long Straddle Strategy, and how can you use this strategy to profit from the crypto options market?
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXZXuxWjcwMLrFE5XH1nI4jsQ4LiY3qTahC4NFfss8qKi4tV1sQeYQt2zug7gXl5QvE_6ra8o8fxbfNZ24GGlWUuPozq82orhS-gxL6IdVdaHnsicCPgrxyE4xPRIAJ8Dk5WomLAAq75YKADMlsbM7UTntl2JmQllgTB7X9OPJBPphBswYwpXxN-sCuQ/s16000/Long%20Straddle%20Option%20Strategy.jpg
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXZXuxWjcwMLrFE5XH1nI4jsQ4LiY3qTahC4NFfss8qKi4tV1sQeYQt2zug7gXl5QvE_6ra8o8fxbfNZ24GGlWUuPozq82orhS-gxL6IdVdaHnsicCPgrxyE4xPRIAJ8Dk5WomLAAq75YKADMlsbM7UTntl2JmQllgTB7X9OPJBPphBswYwpXxN-sCuQ/s72-c/Long%20Straddle%20Option%20Strategy.jpg
TechGlobeX
https://www.techglobex.net/2022/11/long-straddle-option-strategy.html
https://www.techglobex.net/
https://www.techglobex.net/
https://www.techglobex.net/2022/11/long-straddle-option-strategy.html
true
6015647009126982431
UTF-8
Loaded All Posts Not Found Any Posts VIEW ALL Read More Reply Cancel Reply Delete By Home PAGES POSTS View All RELATED ARTICLES: TOPIC ARCHIVE SEARCH ALL POSTS Not Found Any Post Match With Your Request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Just Now 1 Minute Ago $$1$$ minutes ago 1 Hour Ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago More Than 5 Weeks Ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share To A Social Network STEP 2: Click The Link On Your Social Network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy Table of Content