Your net position yields you at a loss if the stock’s price only moves from $300 to $315. Straddle positions often result in profit only when there are large, material swings in equity prices.

The long straddle is an options strategy that includes the purchase of a call and put with the same expiration date and a nearby strike price. Learn how it works.

For example, if a stock trades at $100 a share, an investor would buy a $100 call and purchase a $100 put to set up a long straddle. They would pay a net debit (the cost of buying the call and put ...

This would net you a $4.00 profit since you paid $4.00 for the spread initially. 3. Stock drops to 68 prior to expiration. If the stock falls to 68, you again make a profit. The put is in-the-money by ...

Conversely, your put option would be worth $10 at expiration, and it would cost you $1,000 to buy it back -- resulting in a net loss of $809, after subtracting the net credit of $191.

As of Aug. 24, the call was bid at $1.83 and the put at $2.56, yielding a net credit of $4.39 per pair of contracts, or $439 (net credit * number of contracts * 100 shares per contract).