How to benefit with Straddle Strategy in Uncertain Times?

1. Through this post I will explain the straddle strategy in Options segment which needs to be executed in times when their is uncertainity in the market and market can break in any one direction i.e.e it can be either positive breakout or neagtive breakout.

2. Like in present election scenario the correct direction was to be known only after the announcement of the results and as a result one could not have had easily anticipated the correct direction of market post resultss. However it was sure that market will breakout in one direction.

How to benefit?
4. In such scenario one can buy both Put and call Option at equidistant levels from the prevalent market levels. Thus if market breaks out in either direction one is able to make money as and when the level for which Put and call has been bought or sold and one makes money as this reaction is violent.

Risk Factor
5. 85% of the times it produces results and balance of the time if market does not move than one is likely to lose the premim paid for the options.

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