DislikedSigh. Thanks for the criticism. Since you don't feel like clarifying, maybe Gamma will.
But just for the record... I said the following:
1. Options come with a volatility (via current price and a pricing model) built in.
2. Otherwise, why write them?
3. Implied volatility is the expected level of motion.
4. Strike price is a function of the Black Scholes equation.
5. Realized volatility is what actually happens (or happened).
6. It's hard to make money if price doesn't move to cover the strike price.
7. A straddle is a bet on volatility.
8. A straddle...Ignored
When you take a straddle, it is a bet that the price will move in a direction or another one but you dont know which one (for example when price reaches a major yearly resistance it can either bounce back or pierce and continue)
In this case, you lose on one of your option and gain on the other but the expected pay off comes way after the strike price is reached.
http://i.investopedia.com/inv/dictio...s/straddle.gif