# Long Straddle

**Long straddle** is the option strategy based on volatility, which lies in the simultaneous buying call and put options on one asset with same strikes.

Long straddle has 2 break-even points therefore the buyer expects the stock price to push up rapidly in any direction after long-term market flats and triangles, that is he is looking forward to the increased volatility in the underlying stock during the option existence. This strategy has unlimited reward whereas risk is limited to the initial premium.

Suppose, someone executes Long straddle by buying the call option for the premium of $14.5 and the put option for the premium of $10.5. Suppose, the strike price is $100. The total premium is $25 ($14.5+$10.5). So, break-even point 1 equals $125 ($100+$25) and break-even point 2 is $75 ($100-$25). Thus, a buyer makes profit in case of the asset rapid movement beginning from the price of $125 and higher and $75 and lower.