Strangle

An options strategy similar to a straddle but using out-of-the-money options: buying a call above the current price and a put below it, both with the same expiration. A strangle is cheaper to enter than a straddle because both options are out of the money, but it requires a larger move in the underlying to become profitable. Short strangles, where a trader sells both options to collect premium, are a popular income strategy among experienced options traders willing to accept the risk of a large move.