Option Trading Strategies – Straddle Option Trading Strategy
In this Options Trading strategies video, I have explained Straddle Option strategy in detail where I have covered Long Straddle Option strategy and Short Straddle Option strategy. I have covered other options strategies videos in detail. Link to same is in description box below.
I have begun by explaining basics of Long straddle and short straddle option strategy and have then moved into explaining risk profile and payoff for both long straddle option strategy and short straddle option strategy. Execution of straddle option strategy involves both call options and put options and I have taken up example of Nifty to explain the same.
Towards the end, I have explained the importance of Volatility and how volatility conditions decide which straddle option trading strategy to execute. If volatility is set to expand, option trader should prefer long straddle option strategy and if volatility is set to cool off, option trader should prefer short straddle option strategy.