How Can a Trader Use a Straddle Strategy to Profit from High Implied Volatility?

A Straddle involves simultaneously buying a call option and a put option with the same strike price and expiration date. A trader uses this when they expect a significant price move in the underlying asset, but are unsure of the direction.

High implied volatility increases the potential for a large move, making the Straddle profitable if the move is large enough to cover the cost of both premiums.