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Related to Strangle: strangle strategy


Buying or selling an out-of-the-money put option and call option on the same underlying instrument, with the same expiration. Profits are made only if there is a drastic change in the underlying instrument's price.

Strangle Strategy

An option strategy in which one buys two out-of-the-money options (usually one call and one put) on the same asset at different strike prices. One profits from a strangle position when there is a large price movement on the underlying asset, regardless of the direction. This is because one of the options will become in the money, so long as the price moves in one direction or the other. Loss only occurs if the price of the underlying asset remains largely the same.


A strangle is a hedging strategy in which you buy or sell a put and a call option on the same underlying instrument with the same expiration date but at different strike prices that are equally out-of-the-money.

That is, the strike price for a put is above the current market price of the stock, stock index, or other product, and the strike price for a call is below the market price.

If you buy a strangle, you hope for a large price move in one direction or another that would allow you to sell one of the contracts at a significant profit. If you sell a strangle, you hope there's no significant price move in either direction so that the contracts expire out-of-the-money and you keep the premium you received.

References in periodicals archive ?
O'Hara told gardai he could not explain why he had murdered Lisa but admitted he got the urge to strangle "once or twice a year".
He also tried to strangle her daughter from a previous relationship.
A man living opposite the hotel where Atkinson died said: "It's pretty obvious he's likely to be the guy who tried to strangle that woman late on Friday night.
She fell and he continued to strangle her with both hands until she was dead.
The ERA issued a statement in response to an article in the Racing Post, which stated that one of trainer Marco Botti's horses was confirmed as having contracted strangles after returning from competing in the Dubai World Cup Carnival.
Following confirmation of two cases of strangles in Newmarket last month, Kirk was concerned when one of his string started displaying worrying symptoms.
If the money needed for research can be raised, we are confident we can tackle this problem effectively and stem the spread of strangles.
Strangles is a contagious disease characterised by swollen glands in the head, jaw and throat regions.
A spate of strangles cases has caused rising panic in North Wales this year - with Llandudno Riders Association cancelling its summer show in Glan Conwy tomorrow amid reports of a case nearby.
THE Animal Health Trust has developed a new diagnostic test for the respiratory disease strangles, which will allow early identification of horses exposed to the highly infectious bacterium, it announced yesterday.
The British Horse Society, in conjunction with Intervet UK and the British Equine Veterinary Association, is running a Strangles Awareness Week to highlight the debilitating effects of the equine disease.
HORSE riders have cancelled their annual summer show after a suspected outbreak of strangles.