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Strategy View
Investor thinks that the market will be very volatile in the short-term.
Strategy Implementation
Call option and put option are bought with the same strike price a - usually at-the-money.
Upside Potential
Unlimited.
Break-Even Point at Expire
Lower point is the strike minus the two premiums paid, and the upper is
the strike plus the two premiums.
Downside Risk
Limited to the two premiums paid. (If the investor would like to decrease
the premium paid, a buy strangle might be interesting.)
Margin
Not required.
Comment
Position loses value with passage of time as time value decreases on options.
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