Long Straddle Calculator
Buy a call and a put at the same strike and expiry. You profit if the stock makes a big move in either direction, and your risk is limited to what you pay.
Stock
Call & put you’re buying
Calendar days to expiry: 30
Manual settings
Left blank, each option's IV is worked out from its premium.
Has only a small effect. Leave at 4% if unsure.
Example trade shown. Replace with your own numbers.
Profit / loss by stock price
Profit / loss over time
Values before expiry are estimates using Black-Scholes and each option’s implied volatility. Chances use the volatility of the option closest to today’s price. Assumes both options are held to each date shown and ignores closing fees and dividends. For educational purposes only.
What is a Long Straddle?
A long straddle is a way to profit from a big move in a stock when you don't know which way it will go. You buy a call and a put with the same strike price, usually right where the stock is trading now, and the same expiry date.
If the stock moves sharply up, the call gains. If it moves sharply down, the put gains. Either way, you profit once the move is bigger than the total you paid for both options. If the stock barely moves, both options lose value and you can lose what you paid. Your risk is limited to that cost.
How to use this calculator
1. Enter the stock's current price. Adding the ticker symbol is optional.
2. Enter the strike price (the same for both options), and the premiums for the call and the put.
3. Set the expiry date, or type the number of days to expiry.
4. Enter how many straddles you're buying and any fees per straddle.
The calculator updates as you type. You'll see:
- What the straddle costs (your maximum loss), unlimited maximum profit, and the two break-even prices.
- How big a move, up or down, you need to make a profit, and your chance of getting it.
- Your profit or loss if the stock rises or falls 10% by expiry.
- A chart of your profit or loss at different stock prices, today, at two dates in between, and at expiry. Hover over the chart (or tap it on a phone) to read exact values.
- A table of profit or loss by stock price and date, shown in dollars or as a percentage of your cost.
You can find the premiums in your broker's option chain. Use the mid-price between the bid and the ask for a realistic figure. Under "Manual settings" you can enter one implied volatility for both options, change the interest rate, or set the price range shown in the chart and table.
When is a Long Straddle a good choice?
- You expect a big move but aren't sure of the direction, for example ahead of a major announcement.
- You think the market is underestimating how much the stock will move. Compare the move needed with the expected move from our Expected Move calculator.
- Implied volatility is low and you expect it to rise.
When might it not suit?
- Just before earnings, when implied volatility is usually already high. Once the news is out, IV often drops sharply (IV crush) and can wipe out the gains from the move.
- You expect the stock to stay in a range. Time decay works against you every day.
Things to keep in mind
- At expiry, you need the stock to finish outside the break-even prices to make money.
- Your biggest loss happens if the stock finishes exactly at the strike.
- Time decay is costly for straddles, especially in the last few weeks. Many traders close them well before expiry.
- A long strangle works the same way using out-of-the-money options. It's cheaper but needs a bigger move.
This calculator gives estimates for educational purposes only. It isn't financial advice. Option prices before expiry are modelled, and real prices will differ.