Risk Graphs: Long Call Synthetic Straddle

8-28-2009 5-00-21 PM.pngLongCallsynStraddle-

Much like the Long Put Synthetic Straddle, this strategy entails selling short stock and buying ratio calls to bring the position to delta neutral.  The risk is limited and the cost is actually less than a standard application of the straddle.  It is best to enter the position at a point of low volatility with an expectation of increasing volatility.

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