The Long Strangle position is similar to the Long Straddle strategy, except you purchase the call option(s) and the put option(s) at different strike prices. When entering a Long Strangle an investor will purchase a certain number of out-of-the-money (OTM) call contract(s) and then purchase the same number of out-of-the-money (OTM) put contract(s) for the same target month. Like the Long Straddle position, the Long Strangle has unlimited profit potential if the stock price moves enough in either direction. Since the investor is buying options there is a net debit to open the position. Since the purchased calls and purchased puts are OTM, the net debit is generally less for the Long Strangle than for a Long Straddle position. The maximum risk in the positions is equal to the net debit. By purchasing both a call and a put, there are both upper and lower break even points. A profit is realized on the position if the stock rises above the upper break even (possible unlimited profit potential) or falls below the lower break even (limited profit potential from the lower break even point to zero). The Long Strangle is considered a neutral strategy as the investor stands to profit on the position from a movement in either direction. The investor is typically not concerned which direction the market heads, as long as the stock falls below the lower break even or above the upper break even.
	Buy out-of-the-money (OTM) call(s) in a selected target month.
	Buy the same number of out-of-the-money (OTM) put(s) for the same month.
	The net investment is the net debit (total premiums paid).
	The maximum risk is equal to the net debit (total premiums paid).
	The position has both an upper and lower break even.
	Profits are realized if the stock rises above the upper break even or falls below the lower break even.
Calculations for Long Strangles are:
Upper Break Even =	Call Strike Price + Net Debit
Lower Break Even =	Put Strike Price - Net Debit
Probability Sum =	(Prob. Above Upper Break Even) + (Prob. Below Lower Break Even)
Max Risk =	Net Debit = Cost of Position
Where...
Net Debit =	Premium of Bought Call + Premium of Bought Put
Example: Stock XYZ at $47.83 per share.
Buy the OCT 50 Call for $0.95
Buy the OCT 45 Put for $1.00
Max. Loss =	Net Debit = $1.00 + $0.95 = $1.95
Upper Break Even =	Call Strike + Net Debit = $50.00 + $1.95 = $51.95
Lower Break Even =	Put Strike - Net Debit = $45.00 - $1.95 = $43.05

Advantages of this strategy:
	An investor can profit from this position if the stock moves in either direction.
	The potential profits on the upside are unlimited.
	The potential profits on the downside can be very high as well.
	The max loss is limited to the original cost of the position, i.e. Net Debit
	Lower net debit than the Long Straddle strategy.
	Since both options are OTM, price decay on the options is not as rapid as they are with the Long Straddle.
	No stock is actually owned. (uncovered position).

Cautions with this strategy:
	If the stock expires between the two option strike prices you will sustain the maximum loss (Net Debit).
	If the stock rises above the call strike price but remains below the upper break even you will still incur a loss on the position.
	Likewise, if the stock falls below the put strike price but remains above the lower break even you will still incur a loss on the position.
	Since you are purchasing two different strikes you may need a large move in either direction to obtain a profit.

Research Tips:
	If you like the idea of purchasing two options but are more aggressive: Long Straddle.
	If you were looking to short options in a neutral strategy: Short Strangle.