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Main Menu > Analysis > Special Analysis > Straddle Chain
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Last updated: 09/01/2024, 9:15AM

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Straddle Chain

Watch here, How to use Straddle Chain?

What is Straddle Chain?

A straddle Chain is an options strategy that involves buying/selling both a put and a call option with the same strike price and expiration date. The goal of a straddle chain is to profit from a significant price movement in the underlying security, whether the movement is up or down. The profit potential of a straddle is unlimited, but the risk is also limited to the total cost of the options. This makes straddle chains a relatively low-risk strategy for investors willing to take on some volatility. Straddles are most effective when the underlying security is expected to be volatile. This is because the options will be more expensive if the market is expected to be volatile, and the profit potential will also be greater. There are two types of straddles: long straddles and short straddles.

  • Long straddles are bought when an investor believes that the underlying security will experience a large price movement. The investor profits if the price of the security moves by more than the cost of the options.
  • Short straddles are sold when an investor believes that the underlying security will not experience a large price movement. The seller profits if the price of the security stays within a certain range.

What are the features of a Straddle Chain?

Here are 5 unique features of the TalkOptions website’s Straddle price data:

  • Comprehensive Information : The website provides detailed information on various options, including strike prices, LTPs for both call and put options, price changes, average implied volatility, call and put open interest, and options’ Greeks values and past 5 days Straddle performance.
  • Straddle Price Calculation : The website offers an automatic calculation of the Straddle price by adding the Call Price and Put Price, allowing traders to see the combined cost of both options.
  • Real-time Updates : Traders can access real-time data, enabling them to stay up-to-date with the latest price changes and fluctuations in the Straddle price and other option parameters.
  • Price Change Indicators : The website displays clear indicators for price changes in the Straddle price, allowing traders to quickly assess whether the Straddle is gaining or losing value.
  • Percentage Return Tracking : Alongside the price change, the website also calculates and shows the percentage return, helping traders gauge the profitability of their Straddle position at a glance.

How to interpret Straddle Chain?

The Straddle price section shows the sum of the Call Price and Put Price. For example, if the Call option LTP is 100 and the Put option LTP is 50, the Straddle price would be 150 rupees.
If the Straddle price increases to 170, the Price change section will show +20, with a price change percentage of approximately 13.34%. This report helps traders track the Straddle price and its Greek values for trading decisions.

How to add Position in Portfolio?

Here's how it works:

  • Traders can select the Index/Stock, expiry date, and Butterfly type such as Long call or long Put and select the strike price.
  • Click on the "Portfolio" button positioned here.
  • A user-friendly pop-up window will appear, inviting you to assign a name to your strategy. Once you've done that, simply hit the "Save Strategy" button at the bottom.
  • If you wish to increase the number of lots, you can do so by adjusting the lot value.

With a single click on the suitcase icon above, you can track your strategy's performance in the Live Market. Traders can see the Option Greeks as well. They can see Greek values in Rupees or in Decimal format by just sliding the option that is given.
If you want to Analyze your strategy click on the Strategy box that you saved, and you will find the (Analyze) button, When you click on that you will be redirected to the Strategy Builder page where you can analyze your trades and able to make any adjustments if required.
If a trader wants to Edit the strategy by closing one leg, then he can choose Edit Option, One pop-up window will open where he can manually fill in the Exit Price and click on the Update Strategy below.
If you want to delete that strategy Click on the Delete button.

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