If you think the stock price will stay at or near the strike price, short straddle strategy might you trade
What is straddle strategy?
- Straddle is a neutral options strategy in which a trader buys and sells a put option and a covered call with the same underlying asset, strike price, and expiration date at the same time.
- When investors expect a substantial shift in share price but cannot predict whether the price will rise or fall, they employ the straddle strategy.
- When a trader forecasts that the market will move sharply but cannot predict the direction of movement, the long straddle trading method comes into play.
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