A strangle is an options strategy that involves holding both a call and a put option on the same underlying asset, with different strike prices but the same expiration date). The call option has a higher strike price than the put option, and the strategy allows the holder to profit based on how much the price of the underlying security moves, with a neutral exposure to the direction of price movement). If the options are purchased, the position is known as a long strangle, while if the options are sold, it is known as a short strangle). A long strangle is a defined risk position because the maximum loss is represented by the total amount of premium paid to purchase the call and the put. The owner of a long strangle makes a profit if the underlying price moves far away from the current price, either above or below, and this strategy is used when the forecast is for a big stock price change but the direction of the change is uncertain. A strangle is similar to a straddle position, but the difference is that in a straddle, the two options have the same strike price).