This #strategy involves two options of same strikes price & same expiry, A long straddle is created by buying a call and a put of same strike & same expiry whereas a short straddle is created by shorting a call & put option of same strike & same expiry
Let us say a #stock is trading at Rs 6,000 and premiums for ATM call and put options are 257 and 136 respectively.
If you buys both a call & a put at these prices, then his maximum loss will be equal to the sum of these two premiums paid, which is equal to 393
And, price movement from here in either direction would first result in that person recovering his premium and then making profit. This position is undertaken when trader’s view on price of the underlying is uncertain but he thinks that in whatever direction the market moves
Most of the people are market-averse when it comes to investing their hard-earned money in it. The primary and most significant reason for this is the fear of loss of money.
More often than not, this fear stems from the lack of knowledge surrounding #Markets. In this thread, we try to overcome this fear of investing in #StockMarket by following some easy steps
Here are some of the things you can do to get rid of your fear of investing in stocks
1. Gain Knowledge of Stock Markets:
Start by educating yourself with the basic concepts related to stock markets and how do they work. You can reduce your investing risk significantly by understanding the basic #fundamentals, which are not as tough as you think.