What Multiple Option Positions and Strategies will be on the Series 4 exam?
Option strategies that contain positions in more than one option can be used effectively by investors to meet their objective and to profit from movement in the underlying stock price. The Series 4 exam will contain option questions on spreads, hedging and straddles.
What is a Long Straddle?
A long straddle is the simultaneous purchase of a call and a put on the same stock with the same strike price and expiration month. An option investor would purchase a straddle when they expect the stock price to be extremely volatile and to make a significant move in either direction.