Long Strangle
Buy Call and Put at different strikes
Positions in Chart: Buy 1 lot of 26000 CE + 1 lot of 25600 PE. Spot price: 25800
Setup
Buy OTM Call + Buy OTM Put (different strikes)
When to Use
- Expect large price movement, cheaper than straddle
Market Outlook
Volatility Expectation↗Expected to Rise Sharply
Price DirectionLarge Move Expected Either Direction
Risk & Reward
Breakeven PointCall Strike + Total Premium OR Put Strike - Total Premium
Max Contract LossTotal Premium Paid
Max Position LossSame as Max Contract Loss
Strategy Details
Complexity LevelAdvanced
DirectionBig move in any direction
VolatilityEventful
Number of Legs2 Leg
Strategy TypeDebit
Hedging CapabilityMinor Hedging
Description
A long strangle involves buying a call and put at different strike prices. It is similar to a straddle but cheaper to establish
Example
If NIFTY is at ₹25,800, you might buy a ₹26,000 Call for ₹100 and a ₹25,600 Put for ₹90, paying ₹190 total. You profit if NIFTY moves below ₹25,410 or above ₹26,190.
This information is for educational purposes only and should not be considered as financial advice. Always consult with a qualified financial advisor before making investment decisions. Data is constructed and is not actual. Calculations may have errors.
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