Anticipations
A very volatile, immediate, and sharp swing in the price of the underlying asset is expected. The actual market direction is uncertain, so the positions of this strategy will benefit if the underlying asset either rises or falls.
Characteristics
Unlimited profit / limited loss.
Max profit - unlimited.
Max loss - limited to the net debit required to establish the position.
Creating
Buy call option and put
option with same strike price.
Example
Security(QQQ) price - $35
Long 1 QQQ 35 Call - $2.3
Long 1 QQQ 35 Put - $2
Max profit = unlimited
Max loss = $(2.3 + 2) * 100 = $430
Option Position at Expiration
Comments
Needs a large market move in either direction.
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