Straddle Strategy Option – बाजार अब कहीं भी हो लेकिन होगा सिर्फ फायदा

Straddle option strategy is a technique to make daily profit with low risk.

long straddle

Straddle strategy in options trading is a technique to make a profit and reduce the chances of loss, does not matter where the market will go, only you need to know the volatility of particular stock/Index, if volatility is high then chances of profit would be maximum. 

Straddle can be 2 types (Long & Short)

Long Straddle options strategy : Buy option Call and Put both simultaneously of the same strike price and expiry of particular Stock/index. You will pay the premium to make this straddle, premium value only will be the total maximum loss and profit will be unlimited. If the market goes up then Call will be benefited and if it goes down then Put will be benefited.

Short Straddle option strategy :  Sell option Call and Put both simultaneously of the same strike price and expiry date of particular Stock/index. You will receive the premium to make this straddle, premium value only will be the total maximum profit and loss will be unlimited. This straddle used when the trader believes that the market will not move significantly higher or lower. The maximum profit is the amount of premium collected by writing/Selling the options instrument (Call/Put) and the potential loss can be unlimited, so it is typically a strategy for more advanced traders.

Example of  long straddle options strategy :

ITC share current market price is Rs 250, Long Straddle made through Buy Call  & Put as stated in below picture, paid premium will be Rs 20 for Call and Rs. 20 for Put of ITC stock, total premium paid will be 40.

Straddle strategy in options trading

In this case, maximum loss will premium paid means Rs. 40  only but profit will unlimited, it does not matter whether ITC stock price would be lower or higher, in case of higher profit will be started from Rs 290 and in case of lower profit will be started from Rs. 210.

In the case ITC stock price goes up then Option Call will be benefited and in case ITC price goes down then Option Put will be benefited.

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