What is the purpose of a long strangle option strategy?
A) To anticipate very low volatility in the price of
B) To anticipate moderately high volatility in the pr
C) To anticipate moderate volatility in the price of
D) To anticipate very high volatility in the price of

Question

Quizplus · Accepted Answer

The purpose of a long strangle option strategy is to anticipate very high volatility in the price of an underlying asset. This strategy involves buying both a call option and a put option with the same expiration date but with different strike prices. By having both options, the investor can potentially profit from a significant price move in either direction. However, this strategy also involves higher costs due to purchasing two options.

What Is the Purpose of a Long Strangle Option Strategy