Straddle & Strangle Options Strategies: Profit from Big Moves
Options · 13 min · Published 2026-03-28
Learn straddle and strangle options strategies for trading volatility events. Covers earnings plays, news events, and volatility expansion. By Rami Alame at Tradyom.
Straddles and strangles are options strategies that profit from large price movements in either direction. A straddle buys a call and put at the same strike; a strangle buys out-of-the-money call and put. Both are used before major events like earnings, FDA decisions, or economic data releases where direction is uncertain but magnitude is expected.
Frequently Asked Questions
What is better, a straddle or strangle?
Straddles have higher probability of profit but cost more. Strangles are cheaper but need larger moves. For binary events, straddles are preferred; for general volatility exposure, strangles offer better cost efficiency.
Can I sell straddles and strangles?
Yes, selling (short) straddles/strangles profits from stable prices and IV contraction. However, short straddles have unlimited risk. Only experienced traders should sell volatility. Tradyom covers both sides.
How do I calculate break-even for a straddle?
Break-even = strike price ± total premium paid. If you buy a $100 straddle for $8, break-even is $92 and $108. The stock must move more than $8 in either direction for profit.