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Describe the Basic Mechanics of a ‘Straddle’ Options Strategy.

A Straddle is a volatility strategy involving the simultaneous purchase of a Call and a Put option on the same underlying asset, with the same strike price and expiration date. The goal is to profit from a significant price move in either direction.

The maximum loss is limited to the total premium paid, and the profit is unlimited beyond the breakeven points.

How Does the Premium Relate to the Option Type?
How Can Traders Use Options to Speculate on the Outcome of an Earnings Report?
How Can a Trader Use a Long Straddle Strategy to Profit from Expected Network Announcements?
Why Do Options Deep OTM/ITM Have Low Gamma Regardless of Implied Volatility?