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Strangle

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Short Strangles

A
strangle is an
strategy established through the simultaneous sale of a
and
at different
. This strategy profits most from the passage of time and
contraction, as long as the share price stays between the strikes.
Risk Profile: 30x30 Delta Strangle

Long Strangles

The simultaneous purchase of a
and
at different
would create a
strangle. This strategy can profit when implied volatility expands and the share price moves far beyond the bounds of one of the strikes. Long strangles have a very low probability of profit.
Risk Profile: Long 30x30 Delta Strangle

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