Index XYZ is
between 103.20 or below 96.80 at expiration
Buy 1 XYZ 100 Call at $1.70
Buy 1 XYZ 100 Put at $1.50 

With index XYZ exactly at the strike price of 100 at expiration, both the 100 call and the 100 put would expire exactly atthemoney and with no value. The maximum, predetermined loss of $3.20 (or $320 total) would be realized.
At expiration, with XYZ at either the upside breakeven point of 103.20, or the downside breakeven point of 96.80, the call or puts intrinsic value would be $3.20, the initial cost of the whole straddle.
With XYZ closing at expiration between 103.20 and 96.80, but not at the 100 strike price, one of the options would expire inthemoney and have intrinsic value, with the other expiring worthless. In this case the inthemoney option could be either sold or exercised to recoup some of the original straddle purchase price resulting in a partial loss for the position.
For example, index XYZ closes at 102 at expiration. The put would expire outofthemoney and with no value, and the call would have an intrinsic value (or cash settlement amount) of:
102 XYZ index level
$100 call strike price
$2 intrinsic value (cash settlement amount)
The level of index XYZ did change over one month, but not as much as anticipated. The straddle that cost $3.20 is now worth only the intrinsic value of its inthemoney call, or $2. The investor could sell the call and recoup some of the straddle’s initial purchase price. If the XYZ 100 call is sold for its intrinsic value of $2 then the loss for the position would be:
$3.20 premium initially paid for straddle
$2.00 premium received at call’s sale
$1.20 partial loss
With XYZ at 102 at expiration, the inthemoney XYZ 100 call could also be exercised. The exercise settlement value would be the closing index level of 102. The cash settlement amount would be: 102 (settlement value) – $100 (call strike price) = $2. The partial loss would be the same as if the call were sold for intrinsic value at expiration:
$3.20 premium initially paid for straddle
$2.00 premium received at call’s exercise
$1.20 partial loss