# Strangle

A long (or short) *strangle* is a particular options strategy where you simultaneously **buy** **(or sell) a call and put** with the **different** strike prices and expiration dates on the same underlying asset.

### Long Strangle

This strategy involves simultaneously buying both an out-of-the-money  (OTM) call and a put with different strike prices and expiration dates on the same underlying asset.

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A long strangle is used if a trader anticipates a significant price movement but is uncertain which direction it will go in. When realized volatility is high, and there are significant movements in the underlying in either direction, long straddles can be profitable. When realized volatility is low, long straddles can result in losses.

Unlike a straddle, which uses at-the-money (ATM) options, a long strangle uses out-of-the-money (OTM) options. The strike price of the call option is higher than the current market price of the underlier, whereas the strike price of the put option is less than the current market price of the underlier.&#x20;

Due to this, long strangles are generally less expensive to execute than a long straddle.

**Example:** Suppose the price of BTC is trading at $29,000 today, and we're looking at options that expire in one month from now.

* Buy one OTM **call option** with a strike price of $21,000, paying a $500 premium
* Buy one OTM **put option** with a strike price of $19,000, paying a $500 premium

With the total premium costing $1,000, the long strangle on BTC with strike prices of $19,000 and $21,000 would break even at $14,792 or $20,208 on the expiry date. Therefore it is profitable once the price passes either breakeven point.


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