The Long Straddle is a popular options strategy that combines the benefits of both a long call and a long put on the same underlying asset with the same expiration date and strike price. It allows the trader to act as a buyer of both puts and calls on the same underlying stock or index without paying for both options premiums. This strategy is often used when the trader does not want to pay for both options premiums if he or she is wrong about whether the stock will go up or down.Long straddle allows the trader to get a higher average and/or lower maximum return than the single strategy. However, it is more likely to be liquidated as compared with long call and short put. The trader should consider the duration of the strategy before entering into it.The straddle is a simple options strategy that is frequently used by options traders, but what exactly are the options and how are they used? The straddle is a simple strategy in which the trader purchases one long call and one long put on the same underlying asset. This puts the trader in a neutral position in which they have unlimited profit potential but limited downside risk. The aim of the straddle can be described as a combination of a bull call spread and a bear put spread. It gives the trader unlimited profit potential but limited downside risk. The number of contracts purchased will depend on two factors; how much faith they have in the potential movement of the underlying security and how much they are willing to risk on this trade.
