STRATEGY

Long Straddle

MARKET OPINION

Extreme price volatility

MARKET POSITION

Buy a call and buy a put on the same commodity with the same expiration date and strike price

OPTION STRATEGY
DEBIT/CREDIT

Net debit [premium is paid on both options]

PROFIT POTENTIAL

Unlimited [except to the extent that the futures price cannot fall below zero]

PROFIT POINT

Any futures price less than the [strike price minus the net debit] or any futures price greater than the [strike price plus
the net debit]

LOSS POTENTIAL

Limited to the [difference between the strike prices] minus net credit

LOSS POINT

Any futures price below the [higher strike minus net credit]; maximum loss point is any futures price at or below the lower strike price

BREAK-EVEN-POINT

Two break-even points [strike price + net debit] or [strike price - net debit]

MARGIN REQUIRED

No

DELTA

- [Delta of call bought] +
- [Delta of put bought]