What is a Long Strangle?
A Long Strangle is the cheaper sibling of the Long Straddle. You buy an OTM Call AND an OTM Put at different strikes — both out of the money. Cheaper to enter than a straddle, but requires a bigger move to profit. Ideal when you expect an extreme event but want to minimise your premium outlay.
Nifty at ₹22,000. Budget is tomorrow. You buy the 22,500 CE for ₹50 and the 21,500 PE for ₹55. Total cost: ₹105 × 75 = ₹7,875 — compared to ₹19,500 for the equivalent straddle. Budget announces capital gains tax hike. Nifty craters to ₹21,200. Your 21,500 PE is deep ITM — profit: (₹21,500 − ₹21,200 − ₹55) × 75 = ₹18,375.
At a Glance
Max Profit
Unlimited on extreme moves
Max Loss
Total Premium Paid
Breakeven
Upper Strike + Premium / Lower Strike − Premium
| Action | Type | Strike | Expiry | Qty |
|---|
| Buy | Call (CE) | OTM Upper Strike | 30–60 DTE | 1 Lot |
| Buy | Put (PE) | OTM Lower Strike | Same | 1 Lot |
P&L Simulator
Long Strangle
📊 Long Strangle — Payoff Chart + P&L Calculator
Index Price: 22000 · Call Strike: 22500 · Put Strike: 21500 · Call Premium: 50 · Put Premium: 55 · Lot Size: 75 · Price at Exit: 23000
✓ When to Use / ✕ When to Avoid / ◉ IV / ◷ DTE
3 use items · 3 avoid items
#Volatility Plays
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