Strangle
TradingDefinition
Long a call AND put at different strikes (typically OTM on both sides). Cheaper than a straddle but requires bigger move to profit. Sometimes called the "cheaper directional vol bet."
Selling strangles (short OTM call + put) collects premium and profits if the underlying stays between the strikes. High win rate, occasional crushing losses.
Selling strangles (short OTM call + put) collects premium and profits if the underlying stays between the strikes. High win rate, occasional crushing losses.