Straddles In Options Trading
I’m Meta Matt, Director of Education and welcome to PB University LITE! This is a 50 Class Trading 101 Series geared towards both new and veteran traders alike! We go over everything from Trading Psychology, Technical Analysis, and Options Trading to Commodity Trading, Forex, and more!! This 50 Class series is not designed be taken in order, it is instead designed for traders to browse and pick which classes interest them. I will include the list of classes at the bottom of this page.
Start Trading With Webull: Free Stock Shares
Custom Trading Indicator DISCOUNT: Try StocksBuddy Today
Get A Trading Coach, Premium Alerts, Education, and Community:
1 Month Membership
90 Days (Save 10% Per Month)
1 Year (Save $279)
A straddle is an options trading strategy that involves buying both a call and a put option with the same strike price and expiration date. The idea behind this strategy is to profit from a big price movement in either direction.
For example, let's say a stock XYZ is trading at $100 and I believe that the stock price will make a big move this month, whether it be based off of a catalyst or past trading patterns, I see a big move happening, I just don’t know which way that move will be. I can buy a $100 call option and a $100 put option, with the same one-month expiration date.
If the stock price moves to $130, I can exercise the CALL, meaning buy 100 shares of the stock for $100, and sell it for $130, which would be a $3,000 profit. I would then lose out on the premium from the PUT contract, but the profit from the CALL outweighs that.
On the other hand if the stock instead goes down to $70, I can exercise the PUT, meaning sell 100 shares of the $70 stock for $100 per share, per my contract, for $3,000 profit. And the profit from that would outweigh the loss of the premium from the CALL.
However, if the stock price doesn't move much, and I can’t exercise either contract, I could face a loss due to the premium paid for both options.
PB University LITE Class List
1) Trading Terminology
2) Stock Market Indices
3) Common, Preferred, and Penny Stocks
4) Diversification of Assets
5) Fundamental Analysis Made Easy
6) Technical Analysis Made Easy
7) Risk Management In The Market
8) Portfolio Management
9) How To Follow Market News
10) Trading Psychology
11) Options Explained
12) The Greeks In Options Trading
13) How To Short Sell Options
14) Covered CALLS
15) Spread Trading
16) Online Brokers for Options Trading
17) Implied Volatility Calculators & Tools
18) Protective PUTS
19) Iron Condors
20) Straddles
21) Reading Level 2
22) Taxes
23) Trading Psychology Techniques
24) The Art Of Trading
25) Becoming A Jedi In The Stock Market
26) Futures Trading Explained
27) Commodity Trading 101
28) Regulatory Environments
29) How To Become A Millionaire
30) $100K In 100 Days
31) Wash Sale Rule
32) Behavioral Finance Part 1
33) Behavioral Finance Part 2
34) 5 Charting Indicators
35) Fair Value Gap
36) Insider Trading and Market Manipulation
37) Stock Chart Types
38) Moving Averages 101
39) Base vs Precious Metals
40) Electricity Trading 101
41) Trading Brokers 101
42) 5 Trading Strategies
43) 85% Trading Rule
44) Are Win Rates A Scam?
45) Futures Trading 101
46) ATR Indicator Strategy With The Greeks
47) MACD Indicator 101
48) Bollinger Bands Indicator 101
49) Wedges, Triangles, Flags and Pennants
50) RSI Divergence 101
