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 buy put option with lower strike.
Example
Security(IBM) price - $100
Long 1 IBM 110 Call - $2.8
Long 1 IBM 90 Put - $2
Max profit = unlimited
Max loss = $(2.8 + 2) * 100 = $480
Option Position at Expiration
Comments
Needs a large market move in either direction.
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