Options contracts offer interesting investing strategies not possible with stocks alone. For example, if you believe a stock will move drastically either up or down, you might use a strategy called a long straddle. Salman Khan of the Khan Academy describes this strategy, which employs both put options and call options to take advantage of major price moves.
From this video, you’ll understand:
- The rationale behind the long straddle strategy
- How both put and call options can be bundled to create an investment strategy