Long Straddle
Outlook: Volatility
Volatility
Long 1 ATM call + long 1 ATM put. Direction-blind bet on movement.
Max profit
Unbounded in either direction.
Max loss
Total debit paid.
Breakeven
Strike + total debit (upside) and strike - total debit (downside).
Legs
Long
1×
call
ATM
Long
1×
put
ATM
Structure
Long 1 call + long 1 put at the same strike (usually ATM), same expiration.
When to use
Pre-event or after a tight range, expecting a real move. The straddle price is the market's implied move.
Example
SPY at $450 30 DTE. Long 450 call $7 + long 450 put $6. Debit $13. SPY needs to move past $463 or below $437 to profit.
Notes
- IV crush is the enemy. Long straddles into earnings rarely work for retail.
Build it in the simulator
Open this structure in the app, adjust spot, IV, and DTE, and watch the payoff and Greeks move.
Get the appRelated strategies
Long Strangle
Long 1 OTM call + long 1 OTM put. Cheaper than a straddle, needs a larger move.
Short Straddle
Short 1 ATM call + short 1 ATM put. Collects max premium. Open-ended risk both ways.
Short Strangle
Short 1 OTM call + short 1 OTM put. Wider profit zone than short straddle. Open-ended risk.