{"id":10832,"date":"2024-06-15T11:03:07","date_gmt":"2024-06-15T03:03:07","guid":{"rendered":"https:\/\/slashtraders.com\/?p=10832"},"modified":"2025-09-29T17:53:52","modified_gmt":"2025-09-29T09:53:52","slug":"straddle-vs-strangle","status":"publish","type":"post","link":"https:\/\/slashtraders.com\/en\/blog\/straddle-vs-strangle\/","title":{"rendered":"Why Do We Prefer to Sell Strangles Over Straddles?"},"content":{"rendered":"<p class=\"wp-block-paragraph\">Options trading helps us profit even when the stock prices do not move. We share the differences between two neutral strategies, Straddles and Strangles, and why we prefer trading the Strangles in our portfolio.<\/p>\n\n\n<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<span class=\"bQ80SRoOs94wZzgaytlITvp\"><iframe title=\"Straddle vs Strangle, Which Is Better?\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/tbZT1Vtb-q4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/span>\n<\/div><\/figure>\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662f\u88f8\u8ce3-put\u671f\u6b0a\uff1f\">What Is a Straddle?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">A <a href=\"https:\/\/slashtraders.com\/en\/blog\/best-short-straddle-options-strategy\/\" target=\"_blank\" rel=\"noreferrer noopener\">Straddle<\/a> is a combination of selling an ATM Put and an ATM Call to generate a high premium. If the stock price moves very slightly and stays within the premium we received, then we can close the Straddle for a profit.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-straddle.png\" alt=\"sell disney straddle\" class=\"wp-image-10834\" style=\"width:1024px;height:auto\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-straddle.png 1280w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-straddle-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-straddle-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-straddle-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-straddle-18x10.png 18w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The premium from selling an ATM Put and an ATM Call defines the range of profitability.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The premium received from selling ATM Put and Call would define the range of profit. As long as the DIS stock price does not fluctuate greatly before expiration, the neutral trade would be profitable.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662f\u88f8\u8ce3-put\u671f\u6b0a\uff1f\">What Is a Strangle?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">A <a href=\"https:\/\/slashtraders.com\/en\/blog\/best-strangle-options-strategy\/\" target=\"_blank\" rel=\"noreferrer noopener\">Strangle<\/a> is a combination of selling an OTM Put and an OTM Call to define a range you can profit from. As long as the underlying price does not exceed or drop below the strike prices of Put and Call before expiration the two options contracts will go down in value and we profit as an options seller.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-strangle.png\" alt=\"sell disney strangle\" class=\"wp-image-10838\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-strangle.png 1280w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-strangle-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-strangle-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-strangle-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/sell-disney-strangle-18x10.png 18w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The strike prices of a short OTM Put and a short OTM Call define the range profitability.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The OTM Put strike defines the lower boundary of the price movement. The OTM Call strike defines the upper boundary of the price movement. If the underlying stock price doesn't move beyond the boundaries, the Strangle will be profitable.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662f\u88f8\u8ce3-put\u671f\u6b0a\uff1f\">Differences Between a Straddle and a Strangle<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A Straddle and a Strangle differ by maximum profit, probability of profit and adjustment frequency.<\/p>\n\n\n\n<table id=\"tablepress-59\" class=\"tablepress tablepress-id-59\">\n<thead>\n<tr class=\"row-1\">\n\t<td class=\"column-1\"><\/td><th class=\"column-2\">Straddle<\/th><th class=\"column-3\">Strangle<\/th><td class=\"column-4\"><\/td><td class=\"column-5\"><\/td>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\">Maximum profit<\/td><td class=\"column-2\">High<\/td><td class=\"column-3\">Low<\/td><td class=\"column-4\"><\/td><td class=\"column-5\"><\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\">Range of profitability<\/td><td class=\"column-2\">Narrow<\/td><td class=\"column-3\">Wide<\/td><td class=\"column-4\"><\/td><td class=\"column-5\"><\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\">Adjustment frequency<\/td><td class=\"column-2\">High<\/td><td class=\"column-3\">Low<\/td><td class=\"column-4\"><\/td><td class=\"column-5\"><\/td>\n<\/tr>\n<tr class=\"row-5\">\n\t<td class=\"column-1\"><\/td><td class=\"column-2\"><\/td><td class=\"column-3\"><\/td><td class=\"column-4\"><\/td><td class=\"column-5\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<!-- #tablepress-59 from cache -->\n\n\n\n<p class=\"wp-block-paragraph\">A Straddle has the greater theoretical maximum profit, but the profitability drops sharply with any small price movement. So the probability of profit is usually smaller than a Strangle.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">When the stock price moves, at least one leg of the Straddle becomes ITM, so the contracts have to <a href=\"https:\/\/slashtraders.com\/en\/blog\/buy-to-open-vs-buy-to-close\/\" target=\"_blank\" rel=\"noreferrer noopener\">Buy to Close<\/a> before expiration no matter what.<\/p>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">On the other hand, while the stock price stays within the two strikes of a Strangle, we can wait for the options to <a href=\"https:\/\/slashtraders.com\/en\/blog\/option-greeks\/\" target=\"_blank\" rel=\"noreferrer noopener\">depreciate to zero at expiration<\/a>. So a Strangle trader doesn't need to adjust the trades very often.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle.png\" alt=\"straddle vs strangle\" class=\"wp-image-10845\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle.png 1280w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-18x10.png 18w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The Straddle has a higher maximum profit but needs to Buy to Close early to prevent assignment.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Even though both strategies can profit from the lack of price movements, they can have unlimited losses if a big price move does happen.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-max-loss.png\" alt=\"straddle vs strangle max loss\" class=\"wp-image-10846\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-max-loss.png 1280w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-max-loss-300x169.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-max-loss-1024x576.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-max-loss-768x432.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/straddle-vs-strangle-max-loss-18x10.png 18w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Both the Straddle and the Strangle have unlimited maximum losses.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">Trading an <a href=\"https:\/\/slashtraders.com\/en\/blog\/iron-condor-vs-iron-butterfly\/\" target=\"_blank\" rel=\"noreferrer noopener\">Iron Butterfly or an Iron Condor<\/a> can be a good way to limit your losses just in case things go unexpectedly.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><a href=\"https:\/\/slashtraders.com\/en\/pricing\/?utm_source=blog&amp;utm_medium=banner\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"126\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2021\/05\/blog-trial-banner.png\" alt=\"blog trial banner\" class=\"wp-image-9717\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2021\/05\/blog-trial-banner.png 1280w, https:\/\/slashtraders.com\/wp-content\/uploads\/2021\/05\/blog-trial-banner-300x37.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2021\/05\/blog-trial-banner-1024x126.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2021\/05\/blog-trial-banner-768x95.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2021\/05\/blog-trial-banner-18x2.png 18w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662f\u88f8\u8ce3-put\u671f\u6b0a\uff1f\">How to Find High Probability Strangles<\/h2>\n\n\n\n<p class=\"wp-block-paragraph translation-block\">We use the <a href=\"https:\/\/slashtraders.com\/en\/tools\/options-scanner\/\" target=\"_blank\" rel=\"noreferrer noopener\">Options Scanner<\/a> to find high-probability neutral opportunities.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>We want to choose opportunities with greater than 30 DTE to get the safest theta decay.<\/li>\n\n\n\n<li class=\"translation-block\">We can filter <a href=\"https:\/\/slashtraders.com\/en\/blog\/iv-rank-vs-iv-percentile\/\" target=\"_blank\" rel=\"noreferrer noopener\">IV Perc<\/a> &gt;67% to find opportunities that have a high chance of contracting IV and vega in our favour.<\/li>\n\n\n\n<li>By choosing a Market Cap larger than 10 billion, we avoid choosing stocks that can get manipulated.<\/li>\n\n\n\n<li>We also prefer stocks with Days To\/Since Earnings &gt;30 days so the earnings calls don't provide surprises.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"256\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/best-straddle-and-strangle-settings-1.png\" alt=\"best straddle and strangle settings\" class=\"wp-image-10850\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/best-straddle-and-strangle-settings-1.png 1280w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/best-straddle-and-strangle-settings-1-300x75.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/best-straddle-and-strangle-settings-1-1024x256.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/best-straddle-and-strangle-settings-1-768x192.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/best-straddle-and-strangle-settings-1-18x5.png 18w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Use the Options Scanner to filter for low-risk neutral options.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Finally, we can sort the Strangles ROC by descending order to get a shortlist of the highest return Strangles.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"\u4ec0\u9ebc\u662f\u88f8\u8ce3-put\u671f\u6b0a\uff1f\">Best Strangle Options Right Now<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Sorting the Strangle ROC gives us a list of low-risk, high-return 0.20 delta Strangles to enter.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"405\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/0.20-delta-strangle-1024x405.png\" alt=\"0.20 delta strangle\" class=\"wp-image-10852\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/0.20-delta-strangle-1024x405.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/0.20-delta-strangle-300x119.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/0.20-delta-strangle-768x304.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/0.20-delta-strangle-18x7.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/0.20-delta-strangle.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">A list of low-risk, high-return 0.20 delta Strangles.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">A high return Strangle with relatively low risk right now is ARM. A short Strangle with 0.20 delta:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sell a $90 Put that expires next month.<\/li>\n\n\n\n<li>Sell a $140 Call that expires next month.<\/li>\n\n\n\n<li>Uses $1,061 of Buying Power.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"405\" src=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/arm-strangle-roc-1024x405.png\" alt=\"arm strangle roc\" class=\"wp-image-10853\" srcset=\"https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/arm-strangle-roc-1024x405.png 1024w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/arm-strangle-roc-300x119.png 300w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/arm-strangle-roc-768x304.png 768w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/arm-strangle-roc-18x7.png 18w, https:\/\/slashtraders.com\/wp-content\/uploads\/2024\/06\/arm-strangle-roc.png 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">The ARM 0.20 delta Strangle is the best neutral options opportunity right now.<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">If the ARM price does not escape the Put and Call strike prices, the trade has a maximum return on capital of 51%.<\/p>\n\n\n\n<p class=\"has-ast-global-color-4-background-color has-background wp-block-paragraph\"><a href=\"https:\/\/slashtraders.com\/en\/blog\/slashtraders-vs-sp500\/\" target=\"_blank\" rel=\"noreferrer noopener\">SlashTraders vs S&amp;P 500: 450% Outperformance, Verified Trades and How to Copy Every Alert<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>We share the differences between two neutral strategies, Straddles and Strangles, and why we prefer trading the Strangles in our portfolio.<\/p>","protected":false},"author":1,"featured_media":10833,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"plain-container","ast-site-content-layout":"normal-width-container","site-content-style":"unboxed","site-sidebar-style":"unboxed","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center 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center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":"","_wp_rev_ctl_limit":"5"},"categories":[3],"tags":[56,20,12,64,14,11],"class_list":["post-10832","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-cn","tag-dis","tag-en","tag-es","tag-options","tag-tw"],"_links":{"self":[{"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/10832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/comments?post=10832"}],"version-history":[{"count":4,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/10832\/revisions"}],"predecessor-version":[{"id":13965,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/posts\/10832\/revisions\/13965"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/media\/10833"}],"wp:attachment":[{"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/media?parent=10832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/categories?post=10832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/slashtraders.com\/en\/wp-json\/wp\/v2\/tags?post=10832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}