Learn / Options / Long straddle
Long straddle
You buy a call and a put at the same strike. You need a large move, and you do not pick the direction.
By M.M. · Published 5 Nov 2026
What it is
A long straddle is a call and a put with the same strike and the same expiry, both bought. You pay two premiums. At expiry you need the stock far enough above the strike, or far enough below it, to cover that combined debit.
The loss is largest when the stock finishes at the strike, because both options expire worthless. The gain has no cap if the stock runs. The downside gain is large too, but it stops at a stock price of zero.
When people use it
People buy a straddle when they expect a big move and they do not want to guess the direction. A known date is the usual reason: earnings, a ruling, a policy decision. The move has to be bigger than the two premiums, or the idea was right and the trade still loses.
A $100 stock
Take a stock at $100. Volatility is 25 percent, the risk-free rate is 4 percent, and expiry is 30 days out.
Buy the 100 call for $3.02 and the 100 put for $2.69.
The loss is largest if the stock finishes at 100, where both options expire. A large move in either direction is what pays. You pay a net debit of $5.71. At expiry it breaks even at $94.29 and $105.71. The gain at expiry is unlimited. The most you can lose at expiry is $5.71.
The model uses one volatility for every strike, a flat risk-free rate, and no dividend. A live option quote will differ. Each contract here covers one share. A listed equity contract usually covers 100 shares.
Risks
You can be right that the stock will move and still lose, if it finishes between the two breakevens. Time works against both options every day the stock sits still. If volatility falls after you buy, both prices can drop even without a quiet stock.
The debit is the whole outlay, and it is easy to underestimate. Two at the money options cost more than one. This page does not know the event, and it does not mark a higher volatility into the week of that event.
Try this plan
The builder below starts on this spread at a $100 stock. Change the ticker or the legs, then copy the share link. The same tool lives at the options payoff builder.
Education only. Prices are theoretical Black-Scholes values, not live option quotes, and this is not investment advice.
Type a ticker to fill the spot from the quote, or enter the spot yourself.
| Leg | Premium | Delta | Theta / day |
|---|---|---|---|
| long 1 call $100.00 / 30d | $3.02 | 0.533 | -$0.053 |
| long 1 put $100.00 / 30d | $2.69 | -0.467 | -$0.042 |
This is a long straddle. You are long 1 call at $100.00 and long 1 put at $100.00. They all expire in 30 days. The options cost a net debit of $5.71. At expiry it breaks even at $94.29 and $105.71. The gain at expiry is unlimited. The most you can lose at expiry is $5.71. Model delta is 0.065. Model theta is -$0.095 per day.
Payoff
At $100.00, expiry P&L -$5.71, today $0.00.
| Stock | At expiry | Today |
|---|---|---|
| $80.00 | $14.29 | $13.96 |
| $85.00 | $9.29 | $9.02 |
| $90.00 | $4.29 | $4.43 |
| $95.00 | -$0.71 | $1.05 |
| $100.00 | -$5.71 | $0.00 |
| $105.00 | -$0.71 | $1.62 |
| $110.00 | $4.29 | $5.19 |
| $115.00 | $9.29 | $9.75 |
| $120.00 | $14.29 | $14.64 |
The model uses one volatility for every strike, a flat risk-free rate, and no dividend. A live option quote will differ. Each contract here covers one share. A listed equity contract usually covers 100 shares.