Strangle

Market Terms

We don't know everything about the markets.  We're just devoted to learning.  Taken from those smarter than ourselves, here's how we define Strangle.

An options strategy involving holding both a call and a put option with the same expiration date of the same underlying asset (similar to a straddle) but with different strike prices (differentiating it from a straddle).  This is a good strategy if the trader thinks the underlying security will experience large price movement in the near future but is unsure of the movement direction.  A strangle is mainly profitable if the asset does sharply swing in price.