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What Is the Typical Trading Strategy Employed Just before a Known, High-Impact Event?

Traders often buy a straddle or strangle to profit from a large move, risking loss if the move is small or volatility crushes.
Greeks.Live14.11.25

What Is the Typical Trading Strategy Employed Just before a Known, High-Impact Event?

A common strategy is to buy a straddle or strangle (long volatility) to profit from a large move in either direction, regardless of the direction. However, this strategy risks losing the entire premium if the anticipated move does not materialize or if volatility crushes after the event.

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