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.