In comparing a chooser to its straddle counterpart, which of the following statements is not valid?
A) A straddle is always worth more than chooser.
B) The delta of a straddle is always greater than that of a chooser.
C) The delta of a chooser lies between $- 1$ and $+ 1$ .
D) The delta of a straddle lies between $- 1$ and $+ 1$ .

Question

Quizplus · Accepted Answer

The delta of a straddle, which involves both a call and a put option, can indeed range between -1 and +1, similar to a chooser option. However, the statement that a straddle's delta is always greater than that of a chooser is incorrect because the delta of a straddle can be close to 0 when the underlying asset's price is at the strike price, whereas a chooser option's delta can vary more significantly based on the choice between a call and a put at a future date.

In Comparing a Chooser to Its Straddle Counterpart, Which of the Following