Value-Trades

Long Strangle Strategy: Real Trade Example


Real Example (July 2025)

A long strangle involves buying a call and a put with different strike prices but the same expiration. It's ideal for traders expecting a big move but uncertain of the direction.
  • Stock: XYZ Corp
  • Outlook: Expecting significant volatility
  • Setup: Buy 1 XYZ $105 Call @ $2.50; Buy 1 XYZ $95 Put @ $2.00
  • Total Cost: $4.50 ($450 per contract)
  • Max Loss: $450
  • Max Gain: Unlimited (upside) or substantial (downside)
  • Breakeven: $109.50 (upside) and $90.50 (downside)

Outcomes

Stock Price at Expiration Call Value Put Value Total Value Profit/Loss
$85 $0 $10 $10 +$550
$100 $0 $0 $0 -$450
$115 $10 $0 $10 +$550

Compare With Long Straddle Strategy →

Learn Long Straddle

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