Long straddle-use figures to demonstrate this strategy

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Reference no: EM131070838

Long Straddle: This strategy is when an investor purchases both a call and put option with the same strike price, underlying asset and expiration date simultaneously. An investor will often use this strategy when he or she believes the price of the underlying asset will move significantly, but is unsure of which direction the move will take. This strategy allows the investor to maintain unlimited gains, while the loss is limited to the cost of both options contracts. How can one use figures to demonstrate this strategy?

Reference no: EM131070838

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