Liquidity in Options - Straddle strategy

Hi Zerodha Team,

I was trying a “straddle” Options strategy with DHFL. on Oct 31st I bought 1 Call Option for 26.5 and one Put option for 30 at strike price of 650. Until yesterday I could see there was positive outcome in the Straddle, but today I find the Market price to be at 632 which means the price has dropped significantly from the time I had bout the option. Unfortunately I find my Put Option with no LTP for the 650 strike price and the Call price has dropped to 20 and there is no price action for the put. Has this Option become Zero in put? why is there no liquidity for the OI is see as 45600. Should I continue to wait? or get out of the Call option as well, which will result in huge loss. Appreciate your guidance.
Kiran Ananthu

Use the market depth to see the best bid and ask prices. Even though no trades have taken place, 650PE buyer is available at 34.75.


650CE buyer available at 16.75


No, your put option is In The Money right now.

A long straddle will make you a profit when the gains in premium on one option exceeds the loss in premium of the other option. You are bound to lose the premium on one side as one of these options will expire at 0. You have to ensure the profit in the ITM is greater than the loss in premium of OTM option.

Read more about Long Straddle in the link below:


Thanks a lot Srinivas!! this quiet helpful

1 Like

What if sell the ITM call ([email protected] 5) and put ([email protected]) and buy call ([email protected] 3) and put ([email protected]) of Ashok Leyland.
I need to have around 2.25 Lac in my account (25K to buy and 2Lkh for margin and exposure).
doesn’t matter which way the share price goes I’ll the profit of 18000 on expiry (5+6-3.35-3)*4000.

Are my calculations correct? or there can be other possibilities of getting a loss from this trade?

You will always be in loss

I have already made a profit by this trade :slight_smile: Thanks though

So what was spot price when u exited?

assuming you initiated the trade at LTP and ignoring the tax and brokerage , maximum profit you will get is 2000 and not 18000.

after expiry you will get 20000 , but you already spent 18000 for initiating the position …

unlikely you made any profit in that trade

@Srinivas, Excellent Explanation. Thanks a lot.

Best Regards