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Strangle


An option combination that constitutes a long position in both a call and a put which have the same expiration date and different strike prices (the call strike price is higher than the put strike price). This position is typically taken by investors/ traders who expect a big movement in the underlying stock but are not certain about the direction of that movement.

It is also known as a bottom vertical combination or a long strangle.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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