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Long straddle

BTO (buy to open) a call and BTO (buy to open) a put, same strike and expiration. You need a large move. Exit with two STC (sell to close) tickets.

Buy both sides at the same strike, usually ATM (at the money). You pay two premiums. Profit if the stock moves far enough that one side is worth more than the debit. Time and an IV (implied volatility) crush both hurt.

XYZ $100. BTO (buy to open) $100 call at $4 and $100 put at $3.80. Debit $7.80. Break-evens $92.20 and $107.80. Two BTO (buy to open) to open, two STC (sell to close) to close.

The lab has an IV (implied volatility) slider. Crush both sides and P/L (profit and loss) falls even if the stock sits. That is why this desk often stands aside into a print.

Long straddle — same strike, both sidesA V: you need a large move up or down past the two break-evens. Time and an IV crush hurt.Long straddle — same strike, both sidesTeaching sketchK $100BE $92BE $108lose both premiums
BTO the $100 call and the $100 put. Debit $7.80. Break-evens $92.20 and $107.80. Two BTO to open, two STC to close.

Teaching lab

Long call and long put, same strike

XYZ $100. Debit $7.80. You need a large move. IV slider — crush is the usual miss.

P/L / share
-2.09
×100
-209
Delta
+0.070
Gamma
0.1108
Theta / day
-0.0951
Vega / vol pt
+0.2278

P/L / share

vs the lesson entry

32.570.00$60$80K $100$120$140

Delta

share-equivalent

1.000.00-1.00$60$80K $100$120$140

Gamma

peaks near the strikes

0.1120.000$60$80K $100$120$140

Theta / day

clock

0.012-0.095$60$80K $100$120$140

Vega / vol pt

fear priced in

0.230.00$60$80K $100$120$140

Rho / rate pt

small at 30 days

0.0820.000-0.082$60$80K $100$120$140

Break-evens $92.20 and $107.80. You pay theta both ways. Teaching only.

Try it: What if (teaching lab)

Tickets for this structure

BTO (buy to open) · STO (sell to open) · BTC (buy to close) · STC (sell to close). Illustrative fills only. We never send these orders.

BTO (buy to open)

Open a long

Buy to open (call)

XYZ $100. BTO (buy to open) 1× 30-DTE (days to expiration) $100 call at $4.00 ($400). Only half the structure.

BTO (buy to open)

Open a long

Buy to open (put)

BTO (buy to open) 1× 30-DTE (days to expiration) $100 put at $3.80. Debit $7.80. BE $92.20 and $107.80.

STC (sell to close)

Close a long

Sell to close (one side or both)

XYZ $112. STC (sell to close) both: +$560 on the lesson marks. Hold only the cheap put and it is a new thesis.

BTC (buy to close)

Close a short

Buy to close (not your exit)

You opened with two BTO (buy to open). Exit is STC (sell to close), twice. A short straddle is not this lesson.

Why the desk often stands aside

A print the day before earnings can reprice both options. Being right on the move and still losing after IV (implied volatility) crush is the usual straddle failure. If the chain does not show IV (implied volatility), this site leaves it blank rather than invent a reason to BTO (buy to open) both sides.

How the Greeks move

Long call plus long put: net delta starts near zero, you pay theta both ways, you own a lot of vega. Slide IV (implied volatility) down: that is the crush. Slide the stock past $108 or $92: one side pays for the debit.

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Teaching numbers only — not a live quote, not a fill, not financial advice. All lessons · Back to Practice · Replay · Journal.