1. What Is A Poker Straddle Bet
2. Straddle In Texas Holdem
3. Straddle Someone

In finance, a straddle strategy refers to two transactions that share the same security, with positions that offset one another. One holds long risk, the other short. As a result, it involves the purchase or sale of particular optionderivatives that allow the holder to profit based on how much the price of the underlying security moves, regardless of the direction of price movement.

• A straddle is in the same category as big blinds and antes. It’s money that goes into the pot before any cards have been dealt. Traditionally in a Texas Hold’Em poker game, there is a big blind, a small bind and sometimes there are antes.
• The short straddle page should be incorporated into this one and removed from the Options template. To explain a short straddle, it is best to also explain a long straddle. Remove the short & long straddle pages, and point to the straddle page. The discussion below shows that there is a poker straddle.

A straddle involves buying a call and put with same strike price and expiration date. If the stock price is close to the strike price at expiration of the options, the straddle leads to a loss. However, if there is a sufficiently large move in either direction, a significant profit will result. A straddle is appropriate when an investor is expecting a large move in a stock price but does not know in which direction the move will be.^[1]

At a casino website, there could be just what is a mississippi straddle in poker a few variants to choose from. We recommend that you enroll in the national scheme SENSE (Self-Enrollment, National Self-Exclusion) too, that excludes you from all participating land-based casinos.

The purchase of particular option derivatives is known as a long straddle, while the sale of the option derivatives is known as a short straddle.

• 1Long straddle

Long straddle[edit]

A long straddle involves 'going long,' in other words, purchasing both a call option and a put option on some stock, interest rate, index or other underlying. The two options are bought at the same strike price and expire at the same time. The owner of a long straddle makes a profit if the underlying price moves a long way from the strike price, either above or below. Thus, an investor may take a long straddle position if he thinks the market is highly volatile, but does not know in which direction it is going to move. This position is a limited risk, since the most a purchaser may lose is the cost of both options. At the same time, there is unlimited profit potential.^[2]

For example, company XYZ is set to release its quarterly financial results in two weeks. A trader believes that the release of these results will cause a large movement in the price of XYZ's stock, but does not know whether the price will go up or down. He can enter into a long straddle, where he gets a profit no matter which way the price of XYZ stock moves, if the price changes enough either way. If the price goes up enough, he uses the call option and ignores the put option. If the price goes down, he uses the put option and ignores the call option. If the price does not change enough, he loses money, up to the total amount paid for the two options. The risk is limited by the total premium paid for the options, as opposed to the short straddle where the risk is virtually unlimited.

If the stock is sufficiently volatile and option duration is long, the trader could profit from both options. This would require the stock to move both below the put option's strike price and above the call option's strike price at different times before the option expiration date.

Example: Long straddle P/L graph[edit]

This is an at-the-money (ATM) Straddle with 1 year to expiry:

After 50 days, the P/L graph of the straddle will look as follows (blue line):

The P/L blue graph is negative at prices from approximately 84 to 107 dollars (these are the break-even points), which means that in order for the strategy to be profitable after 50 days, the stock price should be either higher than 107 dollars or lower than 84 dollars.

As time goes by, due to time decay, the straddle P/L graph goes down (and becomes more and more unprofitable), until it reaches the orange line (which is the P/L of the straddle at expiry). Also, the distance between the break-even points increases.

Short straddle[edit]

A short straddle is a non-directional options trading strategy that involves simultaneously selling a put and a call of the same underlying security, strike price and expiration date. The profit is limited to the premium received from the sale of put and call. The risk is virtually unlimited as large moves of the underlying security's price either up or down will cause losses proportional to the magnitude of the price move. A maximum profit upon expiration is achieved if the underlying security trades exactly at the strike price of the straddle. In that case both puts and calls comprising the straddle expire worthless allowing straddle owner to keep full credit received as their profit. This strategy is called 'nondirectional' because the short straddle profits when the underlying security changes little in price before the expiration of the straddle. The short straddle can also be classified as a credit spread because the sale of the short straddle results in a credit of the premiums of the put and call.

A risk for holder of a short straddle position is unlimited due to the sale of the call and the put options which expose the investor to unlimited losses (on the call) or losses limited to the strike price (on the put), whereas maximum profit is limited to the premium gained by the initial sale of the options.

Tax straddle[edit]

A tax straddle is straddling applied specifically to taxes, typically used in futures and options to create a tax shelter.^[3]

For example, an investor with a capital gain manipulates investments to create an artificial loss from an unrelated transaction to offset their gain in a current year, and postpone the gain till the following tax year. One position accumulates an unrealized gain, the other a loss. Then the position with the loss is closed prior to the completion of the tax year, countering the gain. When the new year for tax begins, a replacement position is created to offset the risk from the retained position. Through repeated straddling, gains can be postponed indefinitely over many years.^[4]

Further reading[edit]

• Publication 17 Your Federal Income Tax
• Form 1040 series of forms and instructions
• Social Security's booklet 'Medicare Premiums: Rules for Higher-Income Beneficiaries' and the calculation of the Social Security MAGI.
• McMillan, Lawrence G. (2002). Options as a Strategic Investment (4th ed.). New York : New York Institute of Finance. ISBN978-0-7352-0197-2.
• McMillan, Lawrence G. (2012). Options as a Strategic Investment (5th ed.). Prentice Hall Press. ISBN978-0-7352-0465-2.

Specific

1. ^S, Suresh A. (2015-12-28). 'ANALYSIS OF OPTION COMBINATION STRATEGIES'. Management Insight. 11 (1). ISSN0973-936X.
2. ^Barrie, Scott (2001). The Complete Idiot's Guide to Options and Futures. Alpha Books. pp. 120–121. ISBN0-02-864138-8.
3. ^'Passthrough Entity Straddle Tax Shelter'. IRS.gov. Retrieved Jan 9, 2015.
4. ^Brabec, Barbara (Nov 26, 2014). How to Maximize Schedule C Deductions & Cut Self-Employment Taxes to the BONE -. Barbara Brabec Productions. p. 107. ISBN978-0985633318.

Table Of Contents

You're enjoying your first time in a real poker room.

You've played for several orbits of the button and are feeling like you're getting the hang of things.

Then, suddenly, when you're four seats left of the button, expecting to be second to act.

The player to your right puts out some chips even before picking up his cards, the dealer says, 'Straddle,' and points to you.

Apparently, everyone expects you to do something.

Your mind reels, wondering if your legs are long enough to straddle whatever it is the dealer expects you to straddle and whether it will look pornographic if you do it.

What the hell is going on here?

What do Players Think about the Straddle Bet?

What is a Straddle in Poker?

• The straddle in poker is an extra bet that is placed before the cards are dealt.
• The straddle bet is usually equal to 2x the big blind (BB).
• In some particular cases that we explore in this article, the amount of this bet can be unlimited.

The 'straddle bet' is one of the most confusing subjects to try to explain to new players.

The essential concept is that the straddle is an optional blind bet (i.e., one made before the cards are dealt).

But the number of variations on that basic idea is dauntingly large and bewildering to every new player.

What Is A Poker Straddle Bet

The straddle is an optional blind bet.

You can hit five Vegas poker rooms in a day, and find that they all have different rules for straddles.

Let's start by describing the basic elements of what we might call the 'classic' straddle in poker:

• It occurs in 'flop' games or the versions of poker in which there are community cards used by all players to make their hands — mainly Texas hold'em and Omaha poker.
• The option to place a straddle bet belongs to the player who would otherwise be first to act, which is the seat to the immediate left of the big blind.
• The straddle bet, if it is to be done, must be either put out or verbally announced before the cards are dealt, or at least before the player has looked at his cards. (The former way is easier to enforce, but some casinos allow the latter.)
• The size of the straddle bet is double the big blind, and effectively acts as a voluntary third blind, by which I mean that it sets a new 'limp-in' level. In a $1/$2 no-limit hold'em game, the straddle would be $4. Subsequent players in turn then must either call that $4, raise, or fold. In essence, for one hand the straddle transforms the game from $1/$2 no-limit to $1/$2/$4 no-limit.
• Because the straddler put his money in without having seen his cards, he is given another chance to act after having looked at them, just as the two players in the blinds get. His options are the same as those that the big blind has when there is no straddle: check, fold, or raise, depending on what action has gone before.
• After the flop, everything proceeds in the normal fashion; the fact that there was a preflop straddle has no further effect on how the hand is played.

All of that is not too hard to deal with.

You just think of the straddle as an optional third blind, and everything makes perfect sense.

But poker players are never content to just leave well enough alone. They're always tinkering, coming up with new variations to keep from getting bored and to try to find a new strategic edge.

The most common variant is the 'Button Straddle'

So we started seeing mutations of the basic elements listed above. And these can change the very nature of this bet and the poker straddle definition.

The Straddle Bet in No-Limit Games

In no-limit games, some people reasoned that the 'no-limit' concept should apply to all bets, including the straddle.

As a result, you now sometimes see house rules that allow the straddle to be any amount, up to and including an all-in blind bet. Action-hungry players love this.

Other more conservative players think it ruins the game, turning a contest of skill into a crapshoot when the game has a few players who take advantage of this leeway.

If you ask me, I'm delighted to have a game in which we have players routinely putting in all their chips in the dark.

That's because:

• I am not one of them
• I get to decide whether to call after looking at my cards.

If you think about it, this way of using the straddle bet in poker is an enormous advantage in my favour — a far larger mathematical edge than I could get in most games.

Besides, action like that doesn't tend to go on for very long.

The players doing it either burn through all the money in their pocket, or they get lucky, accumulate a huge stack, and decide to either cash-out or start playing more cautiously.

Poker Straddle: Three Scenarios to Know

There are different scenarios where you might be required to know how to deal with straddling and how to size your first bet.

1. The Under-the-Gun (UTG) Straddle: This is the most common straddle in poker. The UTG player is required to place the straddle bet before the dealer begins to distribute the cards.
2. The Mississippi Straddle: Any player can straddle — as long as they do it before the cards are dealt. If no one re-straddle (yes, that's possible), the player who places the straddle bet is the last one to act before the flop.
3. The Un-Capped Straddle: This is the occasion we have seen above when we spoke about no-limit games. This type removes the 2x BB rule and lets players bet as much as they want / can afford.

The 'Button Straddle'

Things got even more confusing when poker rooms started introducing variations on who can straddle.

Very rarely, you'll find a game in which a straddle is allowed from any position.

Another common variant these days is the 'button straddle.'

The game can't have more than one straddle. The button straddle, if in play, takes precedence over the under-the-gun straddle, and the dealer pushes the latter bet back to the player before passing out the cards.

Unfortunately, giving the straddle option to the player on the button wreaks havoc on the usual order of play, if the straddler is to have the last option to raise, as he does when the straddle is from the first position.

Casinos have devised several ways of handling this anomaly:

• In some places, the use of the button straddle option means that action starts with the under-the-gun player, proceeds clockwise as usual, but then skips the button, jumps to the two blinds, then back to the button for his move.

  Of course, if the button chooses to raise, then the action goes around the table again.

• In other places, the button straddle rearranges the order of play from the get-go, and the small blind is the first to act, followed by the big blind, then around the table to the button.

• Finally, you will rarely encounter a game with even more complicated rules, such as having the order of action between the button and the blinds change depending on how many raises have been made in the meantime.

  It gets horribly complicated and confusing to everyone.

  Don't worry about these obscure variants. They're usually found only in high-stakes, action-crazy games.

I'll save for another day a discussion of whether and when you might want to straddle for tactical advantage.

For now, if you're aware of the traditional procedure and the most commonly found modern variants on that classic, as explained above, you'll be in a position to avoid the confusion and frustration that new players otherwise tend to experience when first encountering the poker oddity called the straddle.

888poker Ambassador Vivian Saliba Explains the Pros and Cons of the Straddle Bet

Usually, players will straddle from under the gun or the button, although on rare occasions they can be allowed to straddle from other positions (a.k.a., a 'Mississippi straddle').

The straddle size is commonly twice the big blind — thus, if the game is $5/$10 no-limit hold'em, the straddle bet would be $20.

The straddle bet increases the stakes of the game you are playing.

There are a few things to consider when putting in a straddle bet in poker or when playing a 'straddled' hand.

First of all, you must keep in mind that when a straddle or third blind bet is played, that will increase the stakes of the game you are currently playing.

If you are playing a $1/$2 no-limit hold'em game with effective stacks of $200, the Stack-to-Pot ratio (or SPR) before any bets are made is 66.66.

That changes if someone decides to throw the straddle bet into the mix.

If someone puts in a $4 straddle (2x the big blind), suddenly the SPR drops to 28.57. This change means you'll have to adjust your preflop ranges and strategy.

Two Key Factors to Consider:

• If you believe you have an edge against the other players, decreasing the SPR might not be the best thing for you to do.

  It might have the effect of limiting the decision-making of short stacks, which in turn gives them fewer opportunities to make mistakes, thereby lessening your edge.

• If most of those sitting around the table are deep-stacked, playing in a bigger game might be a good thing to do, insofar as it can increase your chances of winning bigger pots.

Another argument in favour of straddling is that doing so usually loosens up the game. This creates what could be a better dynamic for you with more action.

This is especially true if you can influence other players to do the same and straddle as well.

You shouldn't feel bad or hesitate at all to refuse to straddle if this is your wish.

When an entire table is straddling (or even most of the players), some don't even realize they are actually playing a bigger game than they should be.

A situation like this one can lead to those players experiencing more pressure and thus play less well.

The straddle bet can even cause them to tilt and make more mistakes.

Even if you believe there are good reasons to straddle, keep in mind that straddling from Under the Gun (as opposed to straddling from the button or other positions) can mean putting in more money and potentially playing bigger pots from out of position.

Most players — even the most profitable ones — lose money when playing from the small and big blinds.

Voluntarily putting in that third blind from UTG thus increases your risk.

Not only you'll be playing a bigger game but very likely be playing from out of position in most post-flop situations.

The scenario is considerably different when you straddle from the button, which is the most profitable position at the table for most players.

Making the game play bigger while enjoying position post-flop can be a profitable strategy.

Remember that making smart decisions is the key to success in poker.

Always make it clear to yourself the reasoning behind your decisions with every move you make when playing poker.

Straddle In Texas Holdem

That goes for decisions made in a hand, as well as the decision whether or not to straddle when given the opportunity.

Even though poker is a social game — and I highly recommend you try your best to enjoy it and also to be sociable while playing — you shouldn't feel bad or hesitate at all to refuse to straddle if this is your wish, even if everyone else is doing it.

Stay disciplined, and evaluate every situation in order to make the best choice for you.

Video: How to Use the Straddle Bet to Win More Hands

In this conversation part of the PokerSimple series, poker-lifers Tommy Angelo and Lee Jones explain how you can use the straddle bet in poker to your own advantage.

Poker Straddle F.A.Q.

Why do you straddle in poker?

Straddle Someone

The straddle bet 'buys' you the right to be the last one to act. This way, you can act as if you were on the big blind even if you are not.

Is the straddle considered to be a raise?

According to Robert's Rules of Poker by Bob Ciaffone, the straddle is a third blind, not a raise. However much the straddle is, that's the new big blind.

How much can you straddle in poker?

The standard straddle bet is equal to 2x the big blind (BB). In a $1/$2 Hold'em game, the straddle would be $4. Once the straddle bet is on the table, all the other players will need $4 to 'Call' and continue playing the hand.

Is straddling profitable in poker?

Hardly so. The straddle is a blind bet, and it is never +EV to invest in your hand before you see what cards you hold.

About the Authors

Robert Woolley lives in Asheville, NC. He spent several years in Las Vegas and chronicled his life in poker on the 'Poker Grump' blog.

Primarily an online player, 888poker Ambassador Vivian 'Vivi' Saliba has recently collected numerous live cashes including making the money in both the 2017 WSOP Main Event and 2017 WSOP Europe Main Event.

Pot-limit Omaha is her favorite variant, and among her many PLO scores is an 11th place in the $10,000 Pot-Limit Omaha 8-Handed Championship at the 2017 WSOP.

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