Part 2 Support and Resistance

Straddle – Big Move Expected (Either Side)

Market View: Highly volatile ±10%
How it Works:

Buy ATM Call + ATM Put

If stock shoots up or crashes, you earn big

Used During:

Results day

Budget announcement

Major news event

Strangle – Cheaper Version of Straddle

Market View: High volatility expected
How it Works:

Buy OTM Call + OTM Put

Cheaper than straddle

Requires bigger move to profit