What does a long straddle strategy primarily expect regarding stock price?

A long straddle strategy is designed to capitalize on significant price movements in a stock, regardless of the direction. This strategy involves purchasing both a call option and a put option on the same underlying asset with the same strike price and expiration date. The rationale behind this approach is that if the stock price experiences large fluctuations—either upwards or downwards—the gains from one of the options will offset the cost of the two premiums paid for both options.

In this context, the expectation is for large volatility swings, as the investor is not making a bet on whether the price will rise or fall; rather, they anticipate that the price will move enough in either direction to yield a profitable outcome. This contrasts with strategies that would seek stable price action or predict moderate fluctuations, which do not align with the objectives of a long straddle.