Long Straddle

Options Spreads Intermediate NIFTY BANKNIFTY FINNIFTY Stock Options

Direction Neutral - expecting big move either way

Backtest Long Straddle on real market data — free

Simulate it in AlgoKing with zero real-money risk. No card required.

Start free →

Quick Reference

Strategy Type	Volatility - Long Gamma/Vega
Market Outlook	Direction Neutral - expecting big move either way
Risk Profile	Limited to Total Premium Paid
Reward Profile	Unlimited on upside, substantial on downside
Time Horizon	Short-term around events - 2-7 days
Capital Requirement	Rs.5,000-15,000 per lot for index straddles
Best Used When	Before major events with IV Rank below 30% and expecting move larger than premium cost

When to Use This Strategy

Before major events with IV Rank below 30% and expecting move larger than premium cost

Payoff Diagram

Profit ▲ │\ / │ \ / │ \ / │ \ / 0 ──┼────\──────────────────/────► Price │ \ / │ \ / Max │ \____________/ Loss │ BE1 A BE2 │ A = Strike Price (ATM - where both options bought) BE1 = Lower Breakeven (Strike - Total Premium) BE2 = Upper Breakeven (Strike + Total Premium)

India-Specific Notes

Trading Hours

Best Entry	Before major events - RBI policy, Budget, Elections, Earnings
Avoid Entry	After events (IV already crushed), low volatility periods
Optimal Monitoring	During event announcements for quick decisions

Expiry Behavior

Weekly Expiry	Thursday (NIFTY, BANKNIFTY, FINNIFTY)
Monthly Expiry	Last Thursday of month
Expiry Day Tips	Straddles lose value rapidly near expiry if no move • Gamma is highest ATM near expiry - big swings possible • Exit before expiry week unless expecting imminent catalyst • STT on ITM options exercised is 0.125% - square off instead

Ready to test Long Straddle?

AlgoKing is a flight simulator for traders — real market data, real backtests, zero real-money risk.

Create your free account

Educational simulation platform. Not investment advice. No SEBI registration required.