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Investment
Strangle
Buying an out-of-the-money call and put at different strike prices to profit from a large price move.
Strangles are cheaper than straddles because both options are out-of-the-money. They are popular when traders expect volatility but want to spend less premium. The trade-off is needing a larger price swing to become profitable.
It's a cheaper version of a straddle — you bet on a big move but give the price more room to happen.
Real world: With the stock at £100 you buy a £95 put and a £105 call. It costs less than a straddle. If the stock moves sharply beyond either strike you profit. It needs an even bigger move than a straddle to break even.
💡 Strangles are the budget version of betting on big moves.