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What Is a Long Straddle?

By Matthew DiLallo – Updated Jun 8, 2025 at 10:56PM

Key Points

  • Long straddles allow gains if a stock moves significantly, either up or down, after setup.
  • The trade's risk is capped at the initial cost, but full loss occurs if stock ends at strike price.
  • Straddles are chosen for big, uncertain moves, costing less than buying stock and options separately.
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