Lets say you buy both a 30 call and a 30 put for 1.00 each. For the put to be profitable the stock price would have to go to 28.99 and then to make up for the call premium it would have to be $1 cheaper or 27.99. On the other side for the call to be profitable the stock price would have to be 31.01 and then another dollar to make up for the put premium or 32.01. So your straddle is 28 to 32, anything inside this and you lose, anything outside you win. If you want to play the volatility you buy the straddle if you think the price is likely to trade flat you sell it and hope to pocket the premiums.