Point to Note:
Straddle Price (Sum of Call Premium and Put Premium)
Example:
If Banknifty Spot price is 43000
43000 Call: 250
43000 Put :250
add both we get the straddle price: 250+250->500.
Straddle price is important for Option Traders. When CE+PE price trade above straddle price. it means sellers are making loss. Short covering rally will begin.Using this edge, option buyers can take a Call or put spread to get the best out of it.