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Straddle |
 | | Straddles are a good strategy to pursue if an investor believes that a stock's price will move significantly, but is unsure as to which direction. |
 | | As a result, a straddle is extremely risky to perform. |
 | | Additionally, on stocks that are expected to jump, the market tends to price options at a higher premium, which ultimately reduces the expected payoff should the stock move significantly. |
| www.investopedia.com /terms/s/straddle.asp (308 words) |
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