Hi,
I'm looking at using options to supplement my trading. I've watched a fair view videos (both from IG and other sources) and (thought) I was comfortable in how they operate, at a very basic level.
I was trying to do a straddle on my demo account - I bought a PUT and a CALL at the same strike price (10890) at 0.5 per point on the DAX/Germany 30.
From everything I've read, it seems the trade will be unprofitable if the market stays stagnant, but should profit either way if the market moves up or down more than my premium.
The problem I'm having is calculating at which point my break-even is, what my maximum risk is and at what part I would start to profit.
Using this video as an example: https://www.ig.com/uk/options-trading/what-are-options-how-do-you-trade-them
It advised the maximum you can lose is the premium you paid for the Option but mine seems to have went above that (or I have misinterpreted what the premium is).
EG, these are the Options I purchased last night.
after I bought them, both were sitting at -£6 from my interpretation of the things I've watched, I expect £6 to be the maximum amount I can lose.
The market has since taken a nose dive so I expect the Put to be in profit but the Call to be at a loss. At the moment it appears the Call is losing far more than the Put is gaining.
When I select either of the orders below it shows it on the chart (I can't view both orders on the chart at the same time) and the chart also flips vertically depending on what order I select:
Is anyone able to shine some light and tell me:
Where can I find the maximum amount I am risking with this trade?
Using the trade above, at what point would I break even (as above, the chart shows % instead of price levels)?
Using the trade above, at which point would it start to become profitable?
Thanks in advance for any replies.