Long straddle ATM vs OTM

[Ank_22]

Let's take a underlying at 25,000. People usually prefer ATM strikes with a long straddle but,

For ex - say I wanna take a deep Otm strike at 26000CE priced at 100 and 23800PE priced at 45.

If my bets are on the market moving up and I put 60-65% of the trade amount in the call and 30-35% of the trade amount in the put. If the market goes up and the put goes to 0 and I am willing to risk that considering I have movement expectations, am I doing something wrong here,

Excluding scenarios of IV crush and range market into consideration here. Also excluding theta as the trade here is in a day trade scenario, am I missing something here?

 

[CyJackX]

A straddle implies both options are at the same strike.
A strangle is when you have them apart as you have here.

The risk is that it doesn't move enough and you just burn theta and lose some change to spread and commissions if you are doing it intraday. Theta burns during the day, too. You require volatility for this.

 

[Ank_22]

A straddle implies both options are at the same strike.
A strangle is when you have them apart as you have here.

The risk is that it doesn't move enough and you just burn theta and lose some change to spread and commissions if you are doing it intraday. Theta burns during the day, too. You require volatility for this.

That's true that theta burns during day too but if I am expecting a volatile move I'm assuming I don't have to worry about it. One thing I wanna know is that how do I know when my IV Is too high that even a big move won't compensate for a IV crush. Is there a way to figure out

 

[CyJackX]

That's true that theta burns during day too but if I am expecting a volatile move I'm assuming I don't have to worry about it. One thing I wanna know is that how do I know when my IV Is too high that even a big move won't compensate for a IV crush. Is there a way to figure out

Expect the unexpected

IV should be compared against HV and typical IV.
News is generally one of the biggest things that changes IV. Companies rarely get news intraday, though, so I don't know how you want to worry about intraday IV changes.

Some platforms allow you to view options changes by IV. I think TOS has a good visual for that. So, you should model the same options at different IVs and see where your move takes you.