Education
Previous Page

Basics of Spreading: Straddles and Strangles

Continuing Education Credit: 1 hour*
*Available for fee-based courses only, please send us an email for more information.

Course Expiration: Course access expires 12 weeks from date of registration

Cost: Free



Course Overview:

Fourth in the series, this module presents detailed explanations and examples of Straddles and Strangles.

The following spreads are covered in this module:

  • Short Straddle
    A short straddle is constructed by selling (writing) a call and a put on the same underlying stock (or index), at a ratio of 1:1, and with the same strike price and expiration month.

  • Long Straddle
    A long straddle is constructed by purchasing a call and a put on the same underlying stock (or index), at a ratio of 1:1, and with the same strike price and expiration month.

  • Short Strangle
    A short strangle is constructed by selling a call and a put on the same underlying stock (or index), at a ratio of 1:1. The expiration months are the same, but the call has a higher strike price than the put.

  • Long Strangle
    A long strangle is constructed by purchasing a call and a put on the same underlying stock (or index), at a ratio of 1:1. The expiration months are the same, but the call has a higher strike price than the put.

Each Spread discussion includes an analysis of:

  • General Nature & Characteristics
  • Debit vs. credit
  • Motivation for Spreading
  • Risk vs. Reward
    - Maximum Profit
    - Maximum Loss
    - Break Even Point
    - Partial Profit/ Loss
  • Profit & Loss Before Expiration
  • Effect of Volatility
  • Effect of Time Decay
  • Assignment Risk

 

How to Register:
Step 1: Log into your MyCBOE account.

 

Step 2: Enter Registration Code

Please click here and enter optedu if prompted.

If you are taken directly to your Course Status Page, please scroll to the bottom for your Current Registration code. Please click on Change Registration code if it is NOT optedu



Step 3: Complete a Student Profile

Complete the student profile page and click on the submit button.



Step 4: Select your Courses

You should now be on your personalized Course Status Page which will list all of our available courses. To register, simply select the course name link.

 
Contact Us:

Click here to send us an e-mail.




Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of Characteristics and Risks of Standardized Options (ODD). Copies of the ODD are available from your broker, by calling 1-888-OPTIONS, or from The Options Clearing Corporation, One North Wacker Drive, Suite 500, Chicago, Illinois 60606. The information on this website is provided solely for general education and information purposes and therefore should not be considered complete, precise, or current. Many of the matters discussed are subject to detailed rules, regulations, and statutory provisions which should be referred to for additional detail and are subject to changes that may not be reflected in the website information. No statement within the website should be construed as a recommendation to buy or sell a security or to provide investment advice. The inclusion of non-CBOE advertisements on the website should not be construed as an endorsement or an indication of the value of any product, service, or website. The Terms and Conditions govern use of this website and use of this website will be deemed acceptance of those Terms and Conditions.