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Anatomy of a Straddle or Strangle

A straddle involves buying a call and put option at the same strike price and expiration to profit from big price moves in any direction, while a strangle buys a call and put at different strike prices, making it cheaper but requiring larger price swings to gain; both strategies are used when expecting high market volatility without a clear direction.

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Anatomy of a Straddle or Strangle

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  1. Anatomy of a Straddle or Strangle Read blog - https://navia.co.in/blog/straddle-strangle-guide-option-traders/

  2. Introduction to Straddle & Strangle Options Trading Strategies for Volatility ● Straddle and Strangle are two popular options strategies to profit from large price movements, regardless of direction. ● Ideal when you expect volatility but are unsure of the market direction. ● Easily implemented using tools like the Navia Mobile App for execution and monitoring. Read blog - https://navia.co.in/blog/straddle-strangle-guide-option-traders/

  3. Understanding a Straddle What is a Straddle? ● Buy 1 Call + 1 Put with the same strike price and expiry. ● Profits from sharp moves in either direction. When to Use: ● When high volatility is expected (e.g., earnings, policy announcements). ● You want equal exposure to both upside and downside. Example: ● Stock at ₹1000 → Buy Call(₹1000) + Put(₹1000). ● Big up or down move → One leg gains significantly. Read blog - https://navia.co.in/blog/straddle-strangle-guide-option-traders/

  4. Understanding a Strangle What is a Strangle? ● Buy 1 Call (higher strike) + 1 Put (lower strike). ● Cheaper than a straddle but needs larger price movement to be profitable. When to Use: ● Expect moderate to high volatility. ● Want to reduce upfront cost of the trade. Example: ● Stock at ₹1000 → Buy Call(₹1050) + Put(₹950). Read blog - https://navia.co.in/blog/straddle-strangle-guide-option-traders/

  5. Pros & Cons of Straddles and Strangles Why Use These Strategies? Benefits: ● Profitable in volatile markets. ● Limited risk – loss capped at premiums paid. ● Flexible – adjust or exit as market evolves. Drawbacks: ● High cost for straddle due to at-the-money options. ● Time decay can erode profits quickly. ● Requires significant price movement to overcome premium costs. Read blog - https://navia.co.in/blog/straddle-strangle-guide-option-traders/

  6. Disclaimer Investment in securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are for illustrative purposes and are not intended as recommendations. Brokerage will not exceed the SEBI prescribed limit. Navia Markets Ltd ,SEBI Registration No.INZ000095034-NSE Member code for CM, FAO & CD: 07708 - BSE Clearing No. for CM, FAO & CD: 6341-MCX Member ID: 45345 NSDL DP ID: IN300378-CDSL DP ID: 12086500-SEBI Registration No. for DP: IN-DP-311-2017-GST Registration number :33AAACM4739R2ZZ-Registered office: Ganga Griha, 4th & 5th Floor, No.9, Nungambakkam High Road, Chennai - 600 034 Email ID: ig@navia.co.in - Contact No: +91 70100 75500 https://bit.ly/naviadisclaimer Read blog - https://navia.co.in/blog/straddle-strangle-guide-option-traders/

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