I realise now straddles only work in insanely high volatile events. Otherwise the breakeven is too high upon expiration of either the call or put option...
Yeah, agreed. But this also has more to do with the nature of the indicies. For instance, you would have done well in Aug 2015 or Jan 2016 with that straddle, but those are extreme moves. The rest of the time the markets slowly churn higher, lower, sideways and will invariably return to your strike (albeit with more erosion).
So when VIX is high but projected to go lower, SELL the straddle. Another strat: when VIX is low, buy the straddle, but immediately close the one side depending on the next move made.
Backtest long straddles on AAPL and you will see it is quite profitable https://www.getvolatility.com
Straddles are a losing proposition -- you think it would be that easy or simple....to buy both sides, and worst case scenario you will break-even...; Trading is more of a fighter pilot kind of thing, rather then a train ride.