An option trading strategy where an investor buys a call and a put on the same underlying with the same expiration date but with different strike prices. Like the long straddle, it is used in volatile markets where the underlying price would rise or fall dramatically. An investor using a long strangle has both sides of volatility covered.
The long strangle is recommended to be utilized if an investor is satisfactorily confident an underlying asset would be volatile, but unsure as to the direction of the underlying price movement.
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