The long straddle, leg by leg, with two real trades
The hedg3 Team
A long straddle is a call and a put at the same strike and expiry, both bought. It is a bet on the size of the move, not its direction: it gains when the stock finishes far enough from the strike in either direction to cover both premiums.
Long straddle
DebitVolatility AgentThe numbers at expiry
- Max profit: Unlimited above $106; $9,400 if XYZ goes to $0.
- Max loss: $600 with XYZ at exactly $100: both premiums.
- Breakevens: $94 and $106: the strike less and plus the $6 debit.
- Cost: $600 paid at the open, nothing held beyond it.
Why the max loss is $600
The $600 paid is the whole risk, and all of it is lost at one price: exactly $100 at expiry, where both options expire worthless. Anywhere else one leg has value, so the loss shrinks as XYZ moves away from $100 in either direction.
| Buy the 100 call | −$300 |
| Buy the 100 put | −$300 |
| Net debit | −$600 |
| The 100 call and 100 put expire | $0 |
| Paid at the open | −$600 |
| Max loss | −$600 |
Exercise at expiry
At expiry one leg is in the money unless XYZ sits exactly on $100. Above it the call is exercised: 100 XYZ bought at $100. Below it the put is exercised: 100 XYZ sold at $100. Selling the pair before expiry takes the value in cash.
Winner: SPCX, Sep 28 to Oct 5
| Leg | Contract | Price |
|---|---|---|
| Buy | SPCX 147 call | $6.25 |
| Buy | SPCX 147 put | $5.625 |
- Opened
- Sep 28, 2026, 3:00 PM ET · SPCX $147.24
- Net debit
- $11.88 · $1,188 paid
- Target
- Sell at $17.81 · +$593
- Stop
- Held to expiry
- Closed
- Oct 5, 2026, 9:43 AM ET · —
- How
- Target hit
SPCX was at $147.24, on the 147 strike, when the straddle was bought for $11.88. A week later the pair was worth $17.81, and the target sold it early on Oct 5: +$593 on $1,188. The row does not carry SPCX's price at the exit, so the chart marks the entry only.
Loser: V, Sep 30 to Oct 5
| Leg | Contract | Price |
|---|---|---|
| Buy | V 385 call | $0.44 |
| Buy | V 385 put | $23.475 |
- Opened
- Sep 30, 2026, 12:27 PM ET · V $361.42
- Net debit
- $23.92 · $2,392 paid
- Target
- Sell at $31.24 · +$732
- Stop
- $18.09
- Closed
- Oct 5, 2026, 3:13 PM ET · —
- How
- Price stop
V was at $361.42, $23.58 under the 385 strike, so this straddle was mostly put: $23.475 of the $23.92 paid. Five days later the pair was worth $18.09, the stop, and the stop sold it on Oct 5: −$583 on $2,392. The row does not carry V's price at the exit.
Every trade, on the record
The two trades above are the Volatility Agent's most recent settled winner and loser. Every long straddle it closes, winners and losers, is on the public track record.
The full strategy page covers the Greeks and when it is used: long straddle. Related: long strangle.
