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Long Strangle

Buying an OTM Call and an OTM Put at different strikes — a lower-cost variation of a Straddle that requires a larger move to reach breakeven.

A Long Strangle involves buying an OTM Call at a higher strike and an OTM Put at a lower strike, same expiry. It typically costs less than a Long Straddle (since both legs are OTM), but requires a larger price move to reach breakeven.

See the full formulas and a worked example, compared directly against the Straddle, in Straddle and Strangle Strategies for Volatile Markets.