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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 ?
After strangling the baby, she immediately called the office of her 31-year-old husband, who then called authorities, the police said.
The police quoted the suspect as telling police investigators that he hit and kicked her before strangling her in a fit of anger after he was told to leave the house during a quarrel over how much pocket money he could have.
LANCASTER - Trial is scheduled to start this month for a Palmdale ex- convict who is charged with bludgeoning and strangling a woman a year ago.
Jermey is accused of strangling her then setting her alight after she said she was leaving him.
Pasadena Superior Court Judge Teri Schwartz rejected suggestions by supporters of Kevin Paul Anderson, 42, of La Verne, that he receive probation for strangling Dr.
This was possibly to give us time to recover from the, um, climax of last week's episode (directed by playwright David Mamet) in which Detective Dutch Wagenbach strangled a cat - a result of his empathising with a serial rapist who had just confessed to strangling his elderly victims in order to "see the look in their eyes before they died".
He is accused of strangling Deepti Gupta, 33, of Glendale, dousing her with gasoline and pushing her and her SUV off a 450-foot cliff.
As the defendant's and victim's spouses listened tearfully from the courtroom's front row, defense attorney Michael Abzug said his client killed his lover by strangling her.
When he then made a comment about strangling her she pointed to a cupboard and said: "There's a rope in there.
Trial is scheduled to begin Wednesday for a Pasadena doctor accused of strangling a pregnant colleague and pushing her car off a cliff.
PASADENA - The attorney for a pediatrician charged with strangling a pregnant colleague failed again Friday to persuade a judge to withhold key evidence from the jury.
The Old Bailey heard Malka claimed he had tried to kill himself by strangling, taking Valium and slashing his hands, arms and neck.