Bought Straddle

Buying a put (red) and a call (blue) with the same strike gives a combined V-shaped payout (green) as payout increases as soon as the price of the underlying moves away from the strike price regardless of direction. As there are two premiums paid, the market needs to move further away from the strike price in order for the straddle to break even than it has for any of the two options by them selves.

Sold Straddle

Selling a put (red) and a call (blue) with the same strike gives a combined V-shaped loss curve (green) as losses increases as soon as the price of the underlying moves away from the strike price in any direction. As there are two premiums received, the market needs to move further away from the strike price in order for the straddle to make a loss than it has for any of the two options by them selves.

Bought Strangle

Buying a put (red) and a call with different strikes and both being out of the money creates a strangle. The premium for this strategy is lower than for the straddle but the market needs to move further before the strategy is in the money.

Sold Strangle

Selling a put (red) and a call (blue), both out of the money creates a sold strangle. The writer has lower risk in loosing money in this strategy than with a straddle if doing this naked. However the premium received is smaller.