Strategy strangle for options, Long strangle

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Trade options FREE For 60 Days when you Open a New OptionsHouse Account Limited Risk Maximum loss for the long strangle options strategy is hit when the underlying stock price on expiration date is trading between the strike prices of the options bought.

At this price, both options expire worthless and the options trader loses the entire initial debit taken to enter the trade.

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The breakeven points can be calculated using the following formulae. Note: While we have covered the strategy strangle for options of this strategy with reference to stock options, the long strangle is equally applicable using ETF options, index options as well as options on futures.

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However, for active traders, commissions can eat up a sizable portion of their profits in the long run. If you trade options actively, it is wise to look for a low commissions broker.

Traders who trade large number of contracts in each trade should check out OptionsHouse.

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Similar Strategies The following strategies are similar to the long strangle in that they are also high volatility strategies that have unlimited profit potential and limited risk.