Economics Options And Futures Questions
The concept of a long straddle strategy in options trading involves purchasing both a call option and a put option with the same strike price and expiration date. This strategy is used when the trader expects a significant price movement in the underlying asset but is uncertain about the direction of the movement. By holding both options, the trader can profit from a substantial price increase or decrease, regardless of the direction, while limiting the potential loss to the premiums paid for the options.