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Strangle
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| A "Strangle" is an option strategy that gives you the potential to profit in a trade no matter which way the stock moves. This is accomplished by purchasing out of the money options on both sides of the stock's price. | ||
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Additional Comments:
A strangle is created by selling or buying a call and put option with the same underlying asset and with the same contract month, but with different strike prices.
For example, buying the Exxon 70 call and 60 put would be a strangle. |
Related Terms: | ||
Straddle A neutral trade that involves simultaneously buying a call and put at the same strike price ... Guts Spread An expensive strategy where the trader buys OTM calls and puts to replicate the risk profile ... Assignment Refers to the option writer's (seller's) obligation to sell or buy a stock or other financial ... | ||
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