Long Straddle vs Long Strangle

A long volatility strategy combining a bought at-the-money call and a bought at-the-money put at the same strike and expiry; profits when the underlying makes a large move in either direction; maximum loss is the total premium paid; most effective before high-impact catalysts.

A long volatility strategy combining a bought out-of-the-money call and a bought out-of-the-money put at different strikes with the same expiry; cheaper than a straddle but requires a larger price move to become profitable; suitable when a large directional move is anticipated but capital is constrained.