15.4 Lessons learnt
- With straddles, you buy/sell options with the same strike price for the same duration.
- Normally this is done around the ” at the money” level.
- Combining strangles with shares can help you lower your risk and obliges you as an investor to think in a strategy!
- Selling/buying calls and puts together are called a strangle.
- By adding short/sold strangles to your share position you can lower your initial purchase price resulting in: Higher profit.
- You know your maximum profit on forehand.
- Ability to work out a strategy before opening a position.