Learn With ETMarkets: Advanced options trading using Straddle and Strangles

Long Straddle and Long Strangle are option buying strategies used by traders in unpredictable events such as election results or company AGMs. For a long straddle, they buy an at-the-money call and an at-the-money put together, making a profit in a heavily rising or falling market. A long strangle, however, uses out-of-the-money options instead. The opposite of these strategies is a short straddle, selling at-the-money call and put to benefit only when the market is flat. It requires more capital and can be riskier than the long strategies.

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