In a long straddle, when the underlying stock goes above the breakeven point, the calls will profit and the puts will be completely out of the money, resulting in an overall profitable position.

The straddle is an options trading strategy, so named for the shape it makes on a pricing chart; your position literally “straddles” the price of the underlying asset. With the straddle, you trade on ...

The following is an updated interview that originally appeared in the Fall 2012 issue of SENTIMENT magazine, and was reprinted in the market commentary from the July 2016 edition of The Option Advisor ...

The financial markets have experienced strong volume growth in the short- dated index option arena. This paper explores the performance of short-dated index options versus the subsequent price move in ...

Options strategies can seem complicated, but that's because they offer you a great deal of flexibility in tailoring your potential returns and risks to your specific needs. One interesting strategy ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J. Brock is a CFA and CPA with more ...

Somer G. Anderson is CPA, doctor of accounting, and an accounting and finance professor who has been working in the accounting and finance industries for more than 20 years. Her expertise covers a ...

How options traders can profit from a big stock move, regardless of direction With earnings season underway, we decided it would be beneficial to explore one way options traders can profit from a big ...

We are halfway through the third full year with daily expirations for NDX index options. As the market is relatively new, the results for buying or selling 1-day at-the-money (ATM) straddles continue ...