A tax straddle is broader than the options strategy of the same name. It arises whenever you hold offsetting positions in personal property that substantially reduce risk of loss, which includes many hedged equity and commodity books.
The consequences are three. Losses on a closed leg are deferred to the extent of unrecognised gain in the remaining offsetting position, the holding-period of the position is suspended while the straddle exists, and interest and carrying charges must be capitalised rather than deducted.
Identified straddles and the mixed-straddle-election provide structured alternatives, and positions consisting entirely of section-1256 contracts are largely outside the problem because everything is marked at year end anyway.
This is general information for the United States, not tax advice. Rules change and depend on your circumstances; consult a qualified tax professional.
Related: mixed-straddle-election, section-1256, constructive-sale, holding-period, iron-condor