Economics Options And Futures Questions
The concept of a long strangle strategy in options trading involves buying both a call option and a put option with the same expiration date but different strike prices. This strategy is used when the trader expects a significant price movement in the underlying asset, but is uncertain about the direction of the movement. By purchasing both a call and a put option, the trader has the potential to profit from a large price swing in either direction. However, it is important to note that the cost of purchasing both options can be higher, and the underlying asset must experience a significant price movement for the strategy to be profitable.