Because a chooser option enables the holder to end up with either a put or a call,it is equivalent to a straddle.

Question

Quizplus · Accepted Answer

A chooser option, which allows the holder to choose between a put or a call option at a certain point during its life, is not equivalent to a straddle. A straddle involves holding both a put and a call option simultaneously, with the same strike price and expiration date, aiming to profit from significant price movements in either direction.

Because a Chooser Option Enables the Holder to End Up