Long Strangle options strategy in Stock market technical analysis #shorts #krinu

Long Strangle is Somewhat similar to Long Straddle in which the investor buys (At The Money) ATM Call and ATM Put options with the same strike , here in Long Strangle the investor buys the same options but with different strike value ;

the purpose is to reduce the premium he pays compared to Long straddle with the same outlook ; here in this strategy the investor buys OTM (Out of The Money) call & Put with different strike value , Same Expiry, for the asset (Nifty) , so we can say that Long strangle is an enhanced or improvised version of Long Straddle to maximize gains with comparatively lesser Premium

In long Strangle the investor gains from the OTM call option he bought when nifty trades above the break even of Leg-1 (call option) considering the out break from the range is extremely bullish , this overwhelming profit offsets the loss he incurs from Leg-2 (OTM Put option)

same if the nifty trades below the break even of Leg-2 , he gains from this Leg which can offset the loss from Leg-1

to implement Long Strangle effectively the outlook for the market or Nifty here should be either Extremely bullish or Extremely Bearish , if nifty trades within the range; between Break even of Leg-1 and Leg-2 the investor incurs loss for both the Leg's , so this strategy to be profitable the nifty should break out of the range he has specified this break out can be Upwards or downwards .

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