Big move, either way
Long Straddle
Profit from a large move — direction doesn't matter.
Buy a call and a put at the same strike. You profit if the price moves far enough in either direction to cover both premiums, so it's a bet on volatility rather than direction — popular around earnings or big events. The cost is high (two premiums), and you lose if the price sits still.
Construction
Buy 1 call + buy 1 put at the same strike.
Max profit
Large (a big move up or down)
Max loss
Both premiums paid (if price ends at the strike)
Breakeven
Strike ± total premium
Play with the payoff
Big move, either way
At expiryToday (30d, 30% IV)
Max profit
Unlimited
Max loss
−$7.37
Breakevens
$92.50 · $107.50
Best when
- You expect a big move but aren't sure which way
- Volatility looks underpriced ahead of an event
- You can stomach losing both premiums if it's quiet