Straddle
An options strategy involving buying both a call and a put at the same strike price, profiting from a large move in either direction.
Explained Simply
A long straddle is a bet on volatility — you profit if the stock makes a big move, regardless of direction. The cost is the total premium paid for both options. You need the stock to move more than the premium to profit. Straddles are popular before binary events (earnings, FDA decisions) where a big move is expected but direction is uncertain. The risk is that the stock doesn't move enough (or IV crushes).
How Tradewink Uses Straddle
Straddles are recommended by our earnings play signals when the AI estimates the actual move will exceed the options-implied expected move. The AI compares the straddle cost to historical average earnings moves for the specific ticker. If the historical move consistently exceeds the priced-in move, the straddle is statistically favorable.
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See Straddle in action
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