Options Straddle Calculator
Calculate breakeven prices, max profit, and max loss for a long or short straddle options position.
Includes a full P&L payoff diagram at expiry.
The Options Straddle
A straddle involves buying (or selling) a call and a put on the same underlying asset with the same strike price and expiration date. It is one of the purest ways to bet on or against a large price move.
Two directions:
| Strategy | Action | Profit from |
|---|---|---|
| Long straddle | Buy call + Buy put | A large move in either direction |
| Short straddle | Sell call + Sell put | The stock staying near the strike |
Long Straddle formulas:
Total Cost = Call Premium + Put Premium Upper Breakeven = Strike + Total Cost Lower Breakeven = Strike − Total Cost Max Profit = Unlimited (upward), significant (downward as price approaches zero) Max Loss = Total Cost (if stock expires exactly at strike)
Short Straddle formulas:
Net Credit = Call Premium + Put Premium Upper Breakeven = Strike + Net Credit Lower Breakeven = Strike − Net Credit Max Profit = Net Credit (if stock expires exactly at strike) Max Loss = Unlimited (upward), substantial (downward)
When each is used:
Long straddles are popular before earnings announcements or major events. The trader does not care which direction the stock moves — only that it moves enough to exceed the premium paid.
Short straddles are used when the trader expects low volatility. They are risky because losses are unlimited on the upside and very large on the downside.
Implied Volatility and the straddle:
The cost of a straddle directly reflects implied volatility. High IV inflates premiums — long straddles become expensive and need a larger move to profit. After a catalyst (e.g., earnings), IV often collapses (IV crush), hurting long straddle holders even if the stock moves.
Comparison to strangle:
A strangle uses different strikes (OTM call + OTM put) instead of the same strike. Strangles are cheaper but require a larger move to become profitable.