Qwoter Investment Advice
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Long strangle

The purchase of an OTM call and an OTM put with the same expiration date.

Additional Comments:

Look for a stable market where you anticipate a large volatility spike. The maximum risk is limited to the net debit paid. The maximum profit is unlimited to the upside and limited to the downside (as the underlying can only fall to zero) beyond the breakevens.

The upside breakeven is calculated by adding the call strike to the net debit, and the downside breakeven is calculated by subtracting the net debit from the put strike.

Related Terms:

Long Straddle
A long straddle is the simultaneous purchase of a put and a call on the same ...

Bull Call Spread
A strategy in which a trader buys a lower strike call and sells a higher strike ...

Bear Put Spread
A strategy in which a trader sells a lower strike put and buys a higher strike ...

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