The buyer of a straddle expects stock prices to move strongly in either direction.

Question

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A straddle is an options trading strategy that involves buying both a call option and a put option with the same strike price and expiration date. This strategy is typically used when the buyer expects the underlying stock or asset to experience a significant price movement in either direction. Therefore, the buyer of a straddle would expect stock prices to move strongly in either direction.

The Buyer of a Straddle Expects Stock Prices to Move