USDINR long straddle

General
1

CMP of USDINR June expiry is 69.35

I wish to create a long straddle but I am a little confused with selecting strike prices. Normally atm strikes are taken for long straddles , but nearest strikes are 69.25 and 69.5

So should I buy 69.25 CE and 69.25 PE , making CE itm and PE Otm since cmp is neither at any strike price

Or should I buy 69.5 CE and 69.25 PE. Making both calls OTM ?

Please help with which scenario is better ?

Thanks

2

When you are taking straddle, you should have a target price for USDINR in mind right?

Based on that, find the profit in both strategies and check which one has better risk reward

Or put 2-3 target prices of USDINR and see which strategy is giving better profit across the target prices.

There is no right answer it all depends on the option data, so get going with MS excel

3

Any excel template you could point me to ? Forgive me I’m fairly new to options

I was very sure USDINR was going to test 69.50 and it went till 69.49 today from 69.35 , but since the whole trend is down over past 2 months , I just didn’t want to do naked calls…

I managed to book some profit with the straddle , not much , but some nonetheless

Now after some reading I figure Otm straddle would have given more profits since delta is lower

4

No template required man

Just open excel and write the scenarios and where each of your option will be in those scenarios and find the profit

5

You can check zerodha varsity which have excel sheets for some strategies

6

Thanks