All of these combinations are bets that implied volatility will increase. A STRADDLE is long a call plus long a put, both at the same strike price (in my example, K = $20). A STRANGLE is also long call plus long put, but the options are out of the money; the strangle is less expensive but requires a greater movement in the price. Neither the straddle nor strangle have a directional bias: they expect a significant increase or decrease in the price. The STRIP combines two puts plus a call: it is biased in favor of the downside. The STRAP combines two calls plus a put: it is biased in favor of the upside
David's XLS is here: https://www.dropbox.com/s/7wc7b354dnv7e26/102218-option-trades-combinations.xlsx
David's XLS is here: https://www.dropbox.com/s/7wc7b354dnv7e26/102218-option-trades-combinations.xlsx
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