What is a long strangle option strategy?
A) A short call option + short put option with a higher strike price than the call option
B) A long call option + long put option with a lower strike price than the call option
C) A short call option + short put option with a lower strike price than the call option
D) A long call option + short put option with higher strike price than the call option

Question

Quizplus · Accepted Answer

A long strangle option strategy involves buying both a call option and a put option with the same expiration date, but with different strike prices. The strike prices should be far enough apart so that the underlying asset must make a significant move in either direction for the strategy to be profitable. In this case, a long call option and a long put option with a lower strike price than the call option is the correct choice as it allows the investor to profit from both upward and downward price movements of the underlying asset.

What Is a Long Strangle Option Strategy