Straddle
A call and a put at the same strike and expiration, usually at the money. Bought, it profits from a large move in either direction; sold, it collects maximum premium in exchange for open-ended risk both ways.
The straddle is the purest listed bet on magnitude versus premium. Its price divided by the stock price approximates the move the market expects through expiration — a number worth computing before every earnings trade.
Long straddles need movement to beat decay; short straddles need calm and courage. Both are volatility trades first and directional trades a distant second.
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