Strap: Bullish-Biased Volatility Bet

A strap buys 2 calls and 1 put at the same ATM strike and expiration. Net debit. Profits from large moves in either direction, with bullish bias — gains accelerate faster on upside moves than downside.

Setup: 2 ATM calls + 1 ATM put. Cost is 1.5–2× a standard straddle. The structure has higher theta and higher absolute cost, but rewards a strongly bullish-biased volatility view. Useful when you expect a big move with a directional lean — e.g., pre-earnings on a stock with bullish expectations but uncertain magnitude.

Compare to a standard long straddle (1 call + 1 put, same strike): straddle is direction-neutral, strap is bullish-biased. The extra long call costs more but pays off bigger on upside moves. Trade-off: more capital at risk, more theta drag if the stock chops sideways.

Frequently Asked Questions

Strap or long call?

Strap when you expect a big move but uncertain direction. Long call when you have high directional conviction.

Strap vs straddle?

Strap costs more but has bullish asymmetry. Straddle is symmetric and cheaper.

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