Long Straddle
Algo Trading

Algo Strategy : Long Straddle

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Algo Strategy : Long Straddle is executed when a trader wants to take advantage of Rise in a Volatility or a strong move in either direction by underline stock on some news or data.

Strategy :

Buy ATM CALL

BUY ATM PUT

NIFTY 50 Underline : 17850

BUY ATM CALL Strike 17850 : Premium Paid Rs. 117

BUY ATM PUT Strike 17850 : Premium Paid Rs. 118

When NIFTY 50 Falls to 17400

Net Profit = 17850-17400-117-118 = Rs.215

When NIFTY 50 Rises to 18200

BUY ATM CALL Strike 17850 : Premium Paid Rs. 117

BUY ATM PUT Strike 17850 : Premium Paid Rs. 118

Net Profit = 18200-17850-117-118 = Rs.115

Formula for Maximum Profit :

Price of Underlying – Strike Price of Long Call – Net Premium Paid OR

Strike Price of Long Put – Price of Underlying – Net Premium Paid

Maximum Profit : Unlimited

Maximum Loss : Premium Paid + Brokerage

ALGO Strategy Synthetic Long : Options Strategy : Synthetic Long Futures

NSE India Options Chain Website https://www.nseindia.com/option-chain 

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