Options / Long strangle
Payoff at expiry for a generic example with the stock at 100. Green is profit, red is loss, dashed lines are break-even prices.
You buy an out-of-the-money call and an out-of-the-money put. It costs less than a straddle but needs a bigger move to profit.
When it is used: When you expect a large move in either direction and want a cheaper entry than a straddle.
Main risk: You lose the full cost if the stock finishes between the two strikes.
- Net cost
- $380 per contract
- Max gain
- Large
- Max loss
- -$380
- Break-even
- 89.2 / 110.8
- Legs
- 2
The legs in this example
| Action | Contract | Strike | Example price |
|---|---|---|---|
| Buy | 1 call | strike 107 | $2.00 per share |
| Buy | 1 put | strike 93 | $1.80 per share |
Research that fits this view
- All companies we cover, with ratings
- SEC filing changes (events that can move a stock)
- How we rate and track calls
Results for this strategy
We track our own hypothetical examples privately and publish each result at least 30 days after the play has closed, wins and losses together, once there are enough closed plays to say something. None have closed yet. This table will list every closed play with its expiry result and a link to the research it came from.
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