A long strangle buys an out-of-the-money call and put. Cheaper than a straddle but needs a bigger move to pay off — a low-cost bet on volatility.
Open the Long Strangle calculator →Buy a strangle when you expect a large move but want a cheaper position than a straddle. You buy an out-of-the-money call and an out-of-the-money put, so the upfront cost is lower — but the stock has to travel further before you profit.
It is popular ahead of earnings and binary events for traders who think the implied move understates what could happen.
Maximum loss is the total premium, lost if the stock finishes between the two strikes. The breakevens are the call strike plus the premium and the put strike minus the premium — a wider gap than a straddle.
Like the straddle, a strangle is exposed to IV crush after a scheduled event, so the realised move must beat both the premium and the volatility drop.
Use the free OptionProfit Long Strangle calculator to load a live option chain, build the trade, and instantly see the payoff chart, breakevens, probability of profit, Greeks and a Monte Carlo simulation of outcomes.
A strangle is cheaper but needs a larger move; a straddle costs more but profits on a smaller move. Both face IV crush afterwards.
Enough to push the stock past a breakeven — the call strike plus the premium, or the put strike minus the premium.
Yes, a short strangle collects premium and profits if the stock stays range-bound, but it carries undefined risk — quite different from buying one.
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