Straddle question

[qubetrader]

Been doing some reading on straddles, so I went to check it out a bit at my brokerage. I am approved to buy a call, and to buy a put, but it wont let me buy a straddle. Am I missing something or can I just place two trades and have the same result?

 

[Windlesham1]

don't understand this,are you sure you are asking about buying? Because you can only lose the premium paid. It makes no sense.

 

[Martinghoul]

Erm, buying a call and a put (same strike) is identical to buying a straddle.

 

[colion]

Been doing some reading on straddles, so I went to check it out a bit at my brokerage. I am approved to buy a call, and to buy a put, but it wont let me buy a straddle. Am I missing something or can I just place two trades and have the same result?

Undoubtedly you are not approved for that level of option trading. Talk to your broker regarding requirements.

 

[SteadyOptions]

Buying a straddle doesn't require any margin. If you leg in (buying calls and puts separately), you will be taking a directional risk.

 

[Windlesham1]

qub you seem to be confused,as no broker will refuse you being allowed to buy any amount of options.
I think you need to get clarity on what you are trying to do. No offence meant.

 

[Moneyduke]

It can happen. Usually the system will not allow you to buy a straddle with unequal number of options. If you are attempting to enter a delta neutral straddle with say, 10 calls and 14 puts your order will be rejected. Same goes for the strikes. It will request the same strike for calls and puts. If this is the case then try to enter the position as a "combo".