What is the primary objective of a "straddle" options strategy?

The primary objective of a straddle options strategy is to profit from significant movements in the price of an underlying asset, regardless of the direction of that movement. A straddle involves buying both a call option and a put option at the same strike price and expiration date. This setup allows the investor to benefit from volatility; if the underlying asset's price makes a large move either up or down, the gains from one of the options (the call or the put) can outweigh the losses from the other, leading to a profitable outcome.

The effectiveness of a straddle relies heavily on market volatility, as it's designed for situations where significant price swings are expected. Therefore, the successful execution of this strategy hinges on the magnitude of the asset's price change, making the potential for profit dependent on such fluctuations rather than the market's overall direction.