STRATEGY | Long Straddle |
MARKET OPINION | Extreme price volatility |
MARKET POSITION | Buy a call and buy a put on the same commodity with the same expiration date and strike price |
OPTION STRATEGY | Net debit [premium is paid on both options] |
PROFIT POTENTIAL | Unlimited [except to the extent that the futures price cannot fall below zero] |
PROFIT POINT | Any futures price less than the [strike price minus the net debit] or any futures price greater than the [strike price plus |
LOSS POTENTIAL | Limited to the [difference between the strike prices] minus net credit |
LOSS POINT | Any futures price below the [higher strike minus net credit]; maximum loss point is any futures price at or below the lower strike price |
BREAK-EVEN-POINT | Two break-even points [strike price + net debit] or [strike price - net debit] |
MARGIN REQUIRED | No |
DELTA | - [Delta of call bought] + |
