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What is a long strangle, in plain words?

A long strangle is buying a call and a put with different strikes and the same expiry 1. The most it can lose is what it cost, if the stock ends between the strikes; it breaks even at the call's strike plus the cost and the put's strike minus it 1. It costs less than a straddle, and needs a bigger move 1.

A $53 call and a $47 put, both with 30 days left at 30% implied volatility on a $50 stock (made-up numbers). Move where the stock ends at expiry.

Source: the StrikePath engine, pricing with the Black–Scholes formula 2 at 4.3% interest a year; a simulated example, not market prices. For learning; not advice.

In numbers

By the formula the call costs $0.70 and the put $0.54 2: $1.24 a share together, against $3.43 for the $50 straddle. It comes out ahead only below $45.76 or above $54.24 1, against $46.57 and $53.43 for the straddle 3.

Time and volatility

Time passing works against it, most of all while the stock sits between the strikes 1. For a straddle, a rise in implied volatility helps 3; a strangle, also two bought options, gains from it too by the formula 2.

What this shows, and what it doesn't

The result at expiry, a share, before fees and the bid-ask spread on two options.

Go further

What is a long straddle? →The same strike, a smaller move.What is IV crush? →What volatility does after news.
Sources (3), checked 20 October 2026 and 27 October 2026
  1. CME Group, “Strangles” (Option Strategies course). Read it (read 27 October 2026)
  2. Fischer Black and Myron Scholes, “The Pricing of Options and Corporate Liabilities”, Journal of Political Economy 81(3), 637–654, 1973. Read it (read 20 October 2026)
  3. The Options Industry Council, “Long Straddle”. Read it (read 27 October 2026)

Now try it on a scenario of your own

Pick where a simulated stock might be, and by when: drag one dot and see, side by side, what buying shares, one option, or a pair of options (a call or put spread) would each do. Free, no sign-up.

Check a trade before you make it →