Strap
Expecting a large move with a bias toward the upside — want to profit from movement in either direction but have double exposure if the stock rallies
Risk Profile at a Glance
How to Construct the Strap
- 1.Buy 2 ATM calls
- 2.Buy 1 ATM put
- 3.Same strike and expiration
- 4.Net debit = cost of all three options
Understanding the Strap
The strap is a modified long straddle with a bullish bias. Instead of the equal 1 call / 1 put ratio of the straddle, the strap buys 2 calls and 1 put at the same at-the-money strike. This creates asymmetric exposure: a rally benefits you twice as much as a fall (two calls vs one put), while a decline still generates profit through the single long put. The strap is used when you expect a large binary event but have a directional lean toward the upside.
Maximum loss is the total premium paid; profit to the upside is theoretically unlimited and twice as responsive as to the downside. It is more expensive than a straddle due to the extra call. The strap is less commonly used than the straddle or strangle because the extra call premium significantly increases the cost. It makes most sense when there is a clear bullish catalyst (such as an FDA approval or earnings beat expectation) combined with a potential downside scenario you also want covered.
In EdgeOS terms, a bull count ignition with an upcoming earnings catalyst is the classic strap setup..
When to Use It — EdgeOS Signal Integration
- ✓Ideal when SCTR > 9 and EdgeOS bull count = 1 (fresh ignition trigger)
- ✓Extension score below 0.8 (Tight or Mod) — stock has room to run
- ✓Confirmed or fluid bullish trend — EMA alignment supports the direction
Compare with Similar Strategies
Other Combos & Advanced Strategies
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Frequently Asked Questions
What is the Strap options strategy?
The strap is a modified long straddle with a bullish bias. Instead of the equal 1 call / 1 put ratio of the straddle, the strap buys 2 calls and 1 put at the same at-the-money strike.
When should I use the Strap?
Expecting a large move with a bias toward the upside — want to profit from movement in either direction but have double exposure if the stock rallies
What is the maximum loss on the Strap?
The maximum loss is fully defined at entry: the net debit paid (for debit strategies) or the spread width minus the credit received (for credit spreads). You can never lose more than this amount.
How does the Strap compare to similar strategies?
The Strap is a bullish debit strategy. Compared to the Long Straddle (directional, debit), the Strap has limited max risk and unlimited max reward. Your choice depends on your directional bias, IV environment, and risk tolerance. The TraderValue strategy comparison tool lets you see the exact payoff differences side by side.