Strangle

(redirected from strangler)
Also found in: Dictionary, Thesaurus, Medical, Idioms, Encyclopedia.
Related to strangler: frog strangler

Strangle

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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Strangle.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
"And we were blamed for it, of course, and it was the end of our career in Belgium, Holland, Germany and France for four years!" Emerging during the late-Seventies, The Stranglers have out-lived many of their punk and post-punk peers, racking up hit after hit into the 1980s with such tracks as Peaches, Golden Brown and No More Heroes.
When did The Stranglers realise that they had something special?
Each additional test would mean the erosion of DNA evidence, and Conley credited Hayes in part for Thursday's major development in the Boston Strangler case.
Lorenzo Gilyard, known as the Kansas City Strangler, is alleged to have killed 13 women.
Police are considering the theory that the strangler drugged his victims before killing them.
Smuggling: Strangler Billy Stewart' Drugs racket: Saughton prison
Karate black belt Jean-Jaques Burnel was a classical guitarist who, after Johnny Sox disbanded, hooked up with Cornwell and Black to start the Stranglers, named after the Boston Strangler.
3MEN+Black formed in 2001 with a line-up that included JJ Brunel of The Stranglers and Bruce Foxton, from The Jam.
There's also debut turns from Lulu, The Stranglers, Paul Young, Eddi Reader, Lisa Stansfield, Bjorn Again, Primitives and Black Box, plus Phill Jupitus, Jimeoin and Emmanuel Sonubi on the comedy stage.