The Straddle Calculator helps options traders analyze the profitability of a Long or Short Straddle strategy. A Straddle involves buying (or selling) both a Call and a Put option at the same Strike Price and Expiry, making it a pure volatility play.
How Straddle Strategy Works
A Long Straddle profits when the stock moves significantly in either direction (high volatility). You buy ATM Call + Put. A Short Straddle profits when the stock stays stable (low volatility). You sell ATM Call + Put.
Profit = (Intrinsic Value of Call + Intrinsic Value of Put) - Total Premium PaidWhere:
- • Upper BE = Strike Price + Total Premium
- • Lower BE = Strike Price - Total Premium
- • Max Risk (Long) = Premium Paid
- • Max Reward (Long) = Unlimited
Long Straddle Example
Nifty is at 18,000. You buy 18000 CE at ₹100 and 18000 PE at ₹100. Total Cost = ₹200.\n\n• If Nifty goes to 18,500: CE is worth ₹500, PE is 0. Profit = ₹500 - ₹200 = ₹300.\n• If Nifty stays at 18,000: Both expire worthless. Loss = ₹200.
Straddle vs Strangle
Compare Volatility Strategies:
| Feature | Straddle | Strangle |
|---|---|---|
| Strikes | Same Strike (ATM) | Different Strikes (OTM) |
| Cost/Premium | Higher | Lower |
| Breakevens | Narrower (Higher probability) | Wider (Lower probability) |
| Delta | Neutral (approx 0) | Neutral (approx 0) |
Frequently Asked Questions
⚠️ Disclaimer
The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.