Strategies / Intermediate · Volatility
Strangle
Buy a call about 5% above and a put about 5% below the price. Cheaper than a straddle, needs a bigger move.
When to use
Same idea as a straddle but cheaper: you accept wider break-evens in exchange for a lower debit.
Risks
Needs an even bigger move than a straddle to profit; a quiet stock loses the full debit.
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