How Can a Combination of a Call and a Put Option Be Used to Create a ‘Straddle’ Strategy?

A straddle is an options strategy created by simultaneously buying or selling a call option and a put option on the same underlying asset, with the same strike price and the same expiration date. A long straddle (buying both) profits if the underlying price moves significantly in either direction, while a short straddle (selling both) profits if the price remains stable.