[Soultrader]

What you are describing there sounds like a straddle in which you purchase a put and a call where both options have the same exercise price and expiration.

Since both put and call are purchased you are long a straddle. While if you sold both put and call options you are short the straddle.

A long straddle has limited risk and unlimited profit potential as long as the markets move in either direction. The markets must move sharply in order to realize large gains and is a strategy used when you think the markets will move but unsure of which way.

If the markets remain flat, you lose the premium paid for on both the put and call. This strategy involves the assumption that volatility will pick up or is high in order to profit from such moves.

Also keep in mind that your gain is the exercise price minus the premium you paid for.