Long Straddle Calculator
A long straddle buys a call and a put at the same strike, profiting on a large move in either direction. It costs both premiums and needs the underlying to travel further than their sum. Enter the strike and both premiums to see the required move.
The arithmetic
The default buys the $100 call and $100 put for $3.50 each — $7.00 total, $700 per straddle.
- Max loss = both premiums, $700, if the stock finishes exactly at $100.
- Breakevens = $93.00 and $107.00 — strike minus and plus the combined premium.
- Required move = 7% in either direction, just to get back to flat.
- Max profit = unlimited on the upside; capped at $9,300 on the downside, where the stock hits zero.
The only number that matters
Everything about a straddle reduces to one comparison: the move you need versus the move the underlying actually makes. The chart above says you need 7%. So the question is whether this underlying, over this many days, moves more than 7% often enough to pay for the times it does not.
That comparison is also, roughly, what implied volatility already encodes. The option market has priced the straddle at the move it expects. Buying it is a claim that the market's expectation is too low — not a claim that the stock will move, which everyone already agrees it might.
Why straddles lose on earnings even when the stock gaps
This is the most common and most expensive surprise in options trading. Ahead of a known event, implied volatility inflates and the straddle gets expensive. The event happens, uncertainty collapses, and implied volatility drops hard — often instantly. A stock that gaps 5% on earnings can leave a straddle buyer with a loss, because the 5% move was smaller than the 8% the straddle was priced for and the volatility crush took the rest.
The expiration chart cannot show this: it assumes you hold to expiry, when only intrinsic value is left. If you plan to close the day after the event, the chart above is not the payoff you will experience.
The cheaper cousin
A long strangle buys out-of-the-money strikes instead, costing less and needing a bigger move. Same bet, different price point.
Where the 100x multiplier comes from
Product specification, not convention: OCC defines a standard equity option as covering 100 shares, premium quoted in points where one point is $100[1] — so a $1.85 premium costs $185, and every payoff here applies that multiplier to the leg structure.
One exception is worth knowing about: adjusted contracts, covered on the options profit calculator.
Calculating it is the easy half
A straddle's required move is one addition. The payoff is arithmetic — anyone can run it. What it cannot show is whether you believed the trade when you put it on, or are describing a winner picked out of a month of noise.
That is the gap kappi closes: the position committed before the fact, sealed and timestamped on a log nobody can edit afterwards. A screenshot of this chart proves you can use a calculator; a sealed commit proves you took the trade. $15/month, no free tier.
Sources
Frequently asked questions
What are the breakevens on a long straddle?
The strike plus the combined premium, and the strike minus it. A $100 straddle costing $7.00 breaks even at $107 and $93.
How much does the stock need to move for a straddle to profit?
More than the combined premium, in either direction. In the default that is 7% of the underlying price by expiration.
Why did my straddle lose money after a big earnings move?
Implied volatility collapse. Straddles are expensive before a known event and reprice sharply lower once the uncertainty resolves, which can outweigh a real move in the underlying.
Straddle or strangle?
The straddle costs more and needs a smaller move; the strangle costs less and needs a bigger one. Compare the required percentage move on each page for the same underlying.