strangle

This is when an investor purchases or sells an equal number of puts and calls, with different strike prices and expiration date. This options strategy provides the opportunity to profit from predicting future market volatility. Long straddles are used to predict high volatility. They can be useful when an investor is confident that a stock price will change dramatically, but cannot predict the direction of the move. Although a strangle is very similar to a straddle, it is generally less expensive.