Why Is a Straddle Position Considered a Speculation on the Asset's

question 3

Essay

Why is a straddle position considered a speculation on the asset's volatility?

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Definitions:

Misjudge Sizes

The incorrect estimation or perception of the actual size of an object, which can be due to cognitive biases or visual illusions.

Feature Detectors

Neurons in the brain that identify specific features of a stimulus, such as shape, angle, or movement.

Vertical Lines

Lines that run up and down and are perpendicular to the horizon.

Optical Illusion

A visual perception that appears to differ from reality, often due to how the brain interprets and processes visual information.