What are the different types of Straddle?
HELLO EVERY ONE LETS UNDERSTNAD NEW TOPIC There are several variations of the core straddle strategy, which involves simultaneously buying a put and call on the same underlying asset. The different types of straddles are distinguished by their option strike prices, expiration dates, and construction methods. The 10 main types of straddles are given below. 1. Long Straddle The basic, traditional Straddle involves buying an at-the-money put and calls with the same strike price and expiration date. It is the most common Straddle, offering unlimited profit potential and capped loss at the cost of the premiums. 2. Short Straddle This involves writing or selling both a put and call option on the same stock at the same strike and expiration. The trader collects the premiums upfront but has uncapped downside risk if the stock moves substantially in either direction. 3. Zero-Cost Collar Straddle Also known as a synthetic straddle, this uses a protective put funded through selling a covered