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Long Straddle

Buying a Call and a Put at the same strike and expiry — betting on a large price move in either direction, rather than a specific direction.

A Long Straddle involves buying both a Call and a Put at the identical strike price and expiry, betting on a significant move in either direction. Maximum loss is capped at the total premium paid for both legs; the position has two breakeven points, one above and one below the strike.

See the full formulas and a worked example in Straddle and Strangle Strategies for Volatile Markets.