Long Strangle
#pixarts.trade , #safebull
Market View – A big move up or down The Trade – Buy a Put below stock price and buy a Call above the strike price. Your view is that if there is a breakout, the stock will cross either of these strikes by a margin Premium – Pay Margin – No When To Do […]
Market View – A big move up or down
The Trade – Buy a Put below stock price and buy a Call above the strike price. Your view is that if there is a breakout, the stock will cross either of these strikes by a margin
Premium – Pay
Margin – No
When To Do
- When the stock is going to move big in one direction
- Avoid buying high IV
Pros
- Big Upside if there is a breakout
Cons
- Low probability of success
- High loss if the stock stays rangebound
- High Vega risk and Theta Risk
Time and Volatility
- Loses time value every day
- Gain if IV goes up
Max Loss : Premium
Max Profit : Very high