Disadvantages of Bought Strangle

Posted on March 24th, 2010 admin
Disadvantages of Bought Strangle 5.00/5 (100.00%) 1 vote
  • It is possible to lose more money if the stays still or within the breakeven range than if you simply bought a call or put option.
  • If the share price rises above the strike price or falls below the strike price but remains below the upper break even or above the lower break even you will still incur a loss on the position.
  • If volatility falls for both or either option, the position could lose with or without a move in share price.

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