SIE practice questionhardStraddles
A long straddle is most profitable when:
- AStock makes a large move in either direction✓ Correct answer
- BStock remains flat
- CVolatility falls
- DOptions expire at-the-money
Explanation
Why A — Stock makes a large move in either direction
Long straddles benefit from sharp moves up or down. Flat stocks and low volatility favor short straddles.
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