The Purchase or sale of an equal number of puts and Call, with the same strike price and Expiration date. A Straddle provides the opportunity to Profit from a prediction about the future Volatility of the Market. Long straddles are used to Profit from High volatility. Long straddles can be effective when an investor is confident that a stock price will change dramatically, but cannot predict the direction of the move. Short straddles represent the opposite prediction, that a stock price will not change.
