Option Straddles

So now that you have learned about options, maybe you think you are ready to buy and sell options. A popular option trading strategy is a straddle. With a straddle, you buy a call and a put with the same exercise price and expiration date. You are betting on the volatility of the underlying stock. That is, you make money with a big price movement either up or down. However, as with any investing strategy there are risks. With a straddle, you will lose if the stock price doesn't move enough to offset the price of both options. For more on straddles, check out this article.