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VolatilityVolatility strategyIntermediate

Long Straddle

Buy a call and put at the same strike – profits from large moves either way.

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Before major events (earnings, Fed) with low IV.

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  1. Pick ATM strike before expected event (e.g. earnings)
  2. Buy call and put simultaneously
  3. Close after the event
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NVDA pre-earnings at 900. Buy 900 call (40) + 900 put (38) = 78 premium. Breakevens 822 and 978.