Long Straddle
In plain English
A bet that something big happens — you do not care which way. You buy both a call and a put at the same strike. A large move either direction pays off; the danger is the price sitting still and both options decaying.
How it's built
Buy an ATM call and put — profit from a big move in either direction.
Illustrative payoff at expiry on a NIFTY-like underlying (spot 24,000, 7d, 13% IV). The shape is the point — open it in the Strategy Lab to tune spot, time and volatility live.
Max profitUnlimited
Max loss₹22,448
Net premiumDr ₹22,448
Breakevens23,655 / 24,345
When to use it
Expecting a large move (event/result) but unsure of direction. Buy when IV is LOW.
Max profit
Unlimited (both tails).
Max loss
Limited to the total premium paid (if price pins the strike).
Common mistakes
- Buying straddles when IV is already high (IV crush after the event).
- Underestimating the daily theta bleed.