Long Straddle and Strangles

I had an idea over the holidays to play one of the energy ETFs by watching to see if it will go higher or lower very quickly. I was late in taking this trade because I missed the opportunity when oil was going down really fast. But I now know how to play volatile markets more effectively. The strategy that I really like is the strangle option play. This is where you buy and out of the money put and an out of the money call. You are basically playing both sides of a trade.  One of the options will expire worthless while the other could potentially be a big winner. This will only happen if the stock moves quickly in one direction. Otherwise both options will expire worthless. So I call this my lottery play.  Instead of going to buy Powerball tickets I can buy options contracts when the market is really volatile.  This way I have the potential of making a lot of money very fast.  I will only allocate small amounts of money for these plays and I will only take them when I know the market is moving up and down erratically.

The straddle play is not as appealing to me because I don't want to lose large amounts of money for a risky bet. Both of these plays are betting that the market will move fast in one direction.  I would rather play the cheaper of the two. A straddle play is basically buying near the money or at the money options on either side and again hoping the market moves fast in either direction. with this play you are paying more money up front and of course you can potentially make more money but it is still a risky bet.