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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 ?
While in prison he told a fellow inmate that he was the Boston Strangler, and this was reported to the police.
After supporting New York star Patti Smith on her 1976 UK tour, the press started comparing the Stranglers, with their keyboard-led heavy bass sound, to The Doors.
Dale Fox, whose daughter Nancy fell victim to the strangler in 1977, said: 'I hope this will be his fatal mistake.
THIS was, as Cornwell explained himself, 'a game of three halves'; the first set a complete rendition of his 1997 solo album Guilty, the third a collection of Stranglers classics (many of which he'd not played since leaving the band in 1990) and, in between, a lively 20 minutes from Brothers of Brazil, a 'punkanova' duo from Sao Paolo, on whose hit TV show 62-year-old Cornwell once appeared.
The remains of Albert DeSalvo, who confessed to the Boston Strangler murders, will be exhumed and compared to DNA from the body of Mary Sullivan.
The Boston Strangler was believed to have raped and murdered 13 single women in Boston between 1962 and 1964.
DeSalvo, married with children, a working-class Army veteran, confessed to the 11 Boston Strangler murders, as well as two others.
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The Teaberry Strangler tells of Theodosia, whose idea of a back alley tour with shopkeepers dressed in historic costumes and inviting visitors for tea seems attractive and fun--until the first murder.
Their lives, loves, and very existence collide with the horror of the notorious Boston Strangler and the ever-present mob.