A Strangle is a type of options trading strategy in which the trader holds a position in both a call option and a put option with different strike prices. The call option gives the trader the right to buy the underlying asset at a certain price (strike price), while the put option gives the trader the right to sell the underlying asset at a certain price. The idea behind a strangle is to profit from price movements in either direction, regardless of whether the market goes up or down.Example:*Let's say an investor buys a call option with a strike price of $50 and a put option with a strike price of $45. If the price of the underlying asset increases to $55, the investor can exercise their call option and buy the asset at $50, resulting in a profit of $5. If the price of the underlying asset decreases to $40, the investor can exercise their put option and sell the asset at $45, resulting in a profit of $5.As a result, the strangle strategy allows the trader to potentially profit in both bullish and bearish market conditions, but it also requires a larger price movement in order to be profitable than a simple long or short position.
