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Long strangle

BTO (buy to open) an OTM (out of the money) call and BTO (buy to open) an OTM (out of the money) put, same expiration. Cheaper than a straddle; needs an even larger move.

OTM (out of the money) call plus OTM (out of the money) put. Debit is usually smaller than an ATM (at the money) straddle. Break-evens are wider. Two BTO (buy to open) to open, two STC (sell to close) to close. A short strangle is not this lesson.

XYZ $100. BTO (buy to open) $105 call at $2.20 and $95 put at $2.00. Debit $4.20. Break-evens $90.80 and $109.20. Cheaper than the $7.80 straddle; the stock must travel farther.

The lab is cheaper than the straddle and needs more travel. Slide IV (implied volatility) and stock the same way — crush still hurts.

Long strangle — cheaper, needs a bigger moveOTM call and OTM put. Flat loss between the strikes, then the same V outside.Long strangle — cheaper, needs a bigger moveTeaching sketchKp $95Kc $105sit still = lose debit
BTO $105 call and $95 put. Debit $4.20. Break-evens $90.80 and $109.20. Still two BTO / two STC. Not a short strangle.

Teaching lab

OTM call plus OTM put

XYZ $100. $105 call at $2.20 and $95 put at $2.00. Cheaper than the straddle; needs more travel.

P/L / share
-2.13
×100
-213
Delta
+0.065
Gamma
0.0870
Theta / day
-0.0750
Vega / vol pt
+0.1787

P/L / share

vs the lesson entry

31.190.00$60$80$100$120$140

Delta

share-equivalent

1.000.00-1.00$60$80$100$120$140

Gamma

peaks near the strikes

0.0880.000$60$80$100$120$140

Theta / day

clock

0.012-0.076$60$80$100$120$140

Vega / vol pt

fear priced in

0.1790.000$60$80$100$120$140

Rho / rate pt

small at 30 days

0.0860.000-0.078$60$80$100$120$140

Break-evens $90.80 and $109.20. Slide IV to feel vega. Teaching only.

Compare: long straddle (same idea, one strike)

Tickets for this structure

BTO (buy to open) · STO (sell to open) · BTC (buy to close) · STC (sell to close). Illustrative fills only. We never send these orders.

BTO (buy to open)

Open a long

Buy to open (OTM call)

XYZ $100. BTO (buy to open) 1× 30-DTE (days to expiration) $105 call at $2.20 ($220).

BTO (buy to open)

Open a long

Buy to open (OTM put)

BTO (buy to open) 1× 30-DTE (days to expiration) $95 put at $2.00. Debit $4.20. BE $90.80 and $109.20.

STC (sell to close)

Close a long

Sell to close

XYZ $111. STC (sell to close) both ≈ +$195 on the lesson marks. Sit at $100: the $420 can die.

BTC (buy to close)

Close a short

Buy to close (not your exit)

You are long both. Exit is STC (sell to close). A later STO (sell to open) on one wing is a different spread.

Strangle vs straddle vs condor

Straddle = same strike both sides. Strangle = OTM (out of the money) both sides, still long. Iron condor = short OTM (out of the money) both sides with wings. If you want a move, you BTO (buy to open). If you want a range, you STO (with protection). Do not confuse a long strangle with a short one on the journal.

How the Greeks move

Same story as the straddle, smaller debit, wider break-evens. Slide IV (implied volatility) for vega. Slide past $109 or $91 before P/L (profit and loss) turns. You still pay theta both ways.

Checking for a quiz…

Teaching numbers only — not a live quote, not a fill, not financial advice. All lessons · Back to Practice · Replay · Journal.