Strangle calculator for long and short expiry payoffs

A strangle combines a call and put with different strikes and the same expiry. This calculator adds your premiums, calculates gross expiry breakevens and converts the premium into a position amount. Select Buy Strangle for a long position or Sell Strangle for a short one. Its IV Status refers to implied volatility, price variability inferred from option prices. It uses a hidden time assumption and should not be treated as quoted market volatility.

Choose matching contracts before entering premiums

A long strangle buys the higher-strike call and lower-strike put. A short strangle sells both. A leg means one option position within that combination. The expiry and underlying must match, and both legs need equal quantities for the combined payoff described here.

Current Spot Price means the underlying price, not either option's premium. OTM means out of the money: the option has no immediate exercise value. OTM Call Strike is the higher exercise price above spot; OTM Put Strike is the lower exercise price below spot. Call Premium and Put Premium are prices per underlying unit. The form does not fetch an option chain or check whether the contracts actually exist.

Lot Size is units per contract and Number of Lots is the contract count on each leg. The calculator multiplies them together. Replace stored example quantities with the exchange quantity for the precise series you are examining. A figure entered as Lot Size is not independently verified by this tool.

There is no expiry date, days-to-expiry, volatility or interest-rate field on this form. Those missing controls matter when interpreting IV Status. The expiry payoff arithmetic itself needs strikes and premiums, while a current valuation needs additional information.

Read premiums, widths and breakevens separately

• Total Premium adds the call and put prices per unit. Premium Value multiplies that sum by lot size and number of lots.
• Upper Breakeven adds combined premium to the call strike. Lower Breakeven subtracts it from the put strike. Both are expiry levels where the combined position breaks even before costs.
• Strike Width is the difference between call and put strikes. Range Width is the wider distance between the expiry breakevens.
• Required Move % measures the distance from spot to the closer breakeven, divided by spot. It does not forecast a move or state its probability.
• Nearest BE, meaning nearest breakeven, picks the closer boundary. A nearer boundary does not imply that it is more likely to be reached.

For a long strangle, the maximum option-leg loss is the paid premium before costs if held to expiry with the underlying at or between strikes. On the upside, potential profit has no fixed price ceiling; on the downside it is finite if the underlying cannot fall below zero. The single Unlimited card does not express that directional difference.

For a short strangle, the maximum gross option profit is the premium received, reached at or between the strikes at expiry. Upside losses have no fixed ceiling and downside losses can be substantial. A required margin deposit is different from a maximum loss.

Strangle vs straddle: how they differ

A straddle uses one strike for both the call and the put. A strangle uses an out-of-the-money call and an out-of-the-money put at different strikes. Here is a made-up comparison on the same fictional underlying at spot 1,000.

So, which is better? Neither wins by definition. The strangle costs less to buy, but needs a bigger move to profit. The straddle costs more, but the breakevens are closer. For a seller, the straddle collects more premium but has less room before losses start, while the strangle collects less with a wider range. See the Bank Nifty straddle calculator for the straddle side.

Worked example with a custom hypothetical lot

Consider a fictional index strangle: spot 1,000, call strike 1,100 with premium ₹20, put strike 900 with premium ₹15, Lot Size 10 and Number of Lots 2. The custom quantity is an example, not a current Nifty, Bank Nifty or stock lot. Assume matching underlying, expiry and quantities on both legs.

Combined premium is ₹20 + ₹15 = ₹35 per unit. Quantity is 10 × 2 = 20 units per leg, so Premium Value is ₹35 × 20 = ₹700. The upper breakeven is 1,100 + 35 = 1,135 and the lower breakeven is 900 − 35 = 865.

Strike Width is 1,100 − 900 = 200 points; Range Width is 1,135 − 865 = 270 points. Spot is 135 points from either breakeven, so Required Move is 135 ÷ 1,000 × 100 = 13.5%. In the tie, the tool selects the upper boundary as Nearest BE.

Choose Buy Strangle and the Max Loss card shows ₹700 before costs. Choose Sell Strangle and Max Profit shows ₹700 before costs. The boundary arithmetic stays the same; the side of the payoff changes. At a boundary the gross expiry result is zero, rather than a profit.

As a separate hand-calculated expiry scenario, suppose the fictional underlying settles at 1,160. The call pays 1,160 − 1,100 per unit and the put has no exercise value. Long gross profit is ((1,160 − 1,100) − 35) × 20 = ₹500. This form has no final-settlement input or P&L-at-price card, so that scenario is an explanation beyond its displayed outputs.

Strangle payoff at expiry: the example in a table

The calculator shows boundaries and totals, not a payoff chart. This table works through the same fictional example (call 1,100 at ₹20, put 900 at ₹15, 20 units per leg) at different settlement prices. Results are gross, before charges. A short strangle has the same numbers with the opposite sign.

Between the two strikes, both options expire worthless and the long side loses the full ₹700 premium. Beyond the breakevens the result grows with every point. On the short side the premium is the most you can keep, and losses on a big move can be much larger than the premium.

Expiry boundaries are different from an early exit

Before expiry, closing the position means using the actual exit premiums of both legs. A move beyond a strike does not by itself recover the combined premium, and crossing a gross expiry breakeven does not establish an early-exit result. Record the exit quotes, quantities that actually traded and costs separately.

For another payoff comparison, see the Bank Nifty straddle calculator, where the two legs use the same strike. The single-option profit calculator can help inspect an individual leg. Confirm each form's quantity labels before comparing rupee totals.

Long vs short strangle: how each side behaves

A long strangle buys both options. The most you can lose is the premium paid, and profit grows if the underlying moves far in either direction. It also loses value as time passes if the underlying stays between the strikes. A short strangle is the reverse: you receive the premium, and keep it all if the underlying settles between the strikes. A large move in either direction produces losses, and the loss on the upside has no fixed ceiling.

Which side suits you depends on your expectation of movement, how much loss you can accept, and the margin you can post. A long strangle risks a known, limited amount. A short strangle risks an amount that can be many times the premium. Neither side is a prediction, and the calculator cannot say which is more likely to pay. Read long strangle and short strangle for the strategy side.

Short strangle margin in India

Selling options needs margin. For an unhedged short strangle, the broker collects margin upfront from you, based on exchange risk calculations (SPAN margin plus exposure margin, see SPAN margin). On the day an option expires, SEBI's circular of 1 October 2024 added an extra 2% extreme loss margin for sellers of options expiring that day, from 20 November 2024. The margin amount changes with the underlying, its volatility, the strikes and the expiry, so no fixed figure on this page would be reliable.

Use your broker's margin calculator for the exact contracts before you place a trade. Remember that margin is not the same as maximum loss. The margin required for a short strangle can be smaller than the loss if the market gaps. If you hedge the position by buying farther options, the margin requirement and the maximum loss both change, and the structure becomes a different strategy, such as an iron condor.

The IV Status card has a limited meaning

Implied volatility means the volatility inferred from an option price under a pricing model. This page's IV Status backs a percentage out of combined premium relative to spot using a stored horizon. You cannot set the actual remaining time in the form. The percentage is therefore not a verified quote for either option or the market.

Do not use that card to decide whether premiums are cheap or expensive. The implied volatility guide explains the concept separately. This calculator also excludes brokerage and statutory costs, so its gross boundaries are not final net-profit thresholds.

Zero or blank premium inputs can be silently replaced by positive example premiums. Check Total Premium after an edit, and keep put strike below call strike. The form does not enforce every condition required for the displayed maximum-loss and breakeven interpretation.

What traders do when one side of a strangle is tested

When the underlying moves toward one strike, traders consider a few responses. None is guaranteed to work, and each has a cost.

• Close the tested leg and keep the other. This limits the loss on the tested side but leaves the other leg exposed.
• Close the whole position. This ends the risk but may lock in a loss.
• Roll the untested leg closer. This collects more premium but narrows your range and adds risk.
• Buy a farther option as protection. This caps the loss but costs premium.

Decide your rule before you enter the trade, for example at which level or loss you will act, and write it down. Each adjustment is a new trade with its own premium, charges and risk, so the original breakevens no longer apply. In a journal, log the original plan and each adjustment as separate entries, along with the reason. That makes it possible to see later whether adjusting helped or just added costs.

Breakevens are not probabilities

The Required Move % card shows how far the underlying must travel to reach the nearer breakeven. It does not say how likely that is. Option prices reflect what the market expects, and the calculator does not take any such view. Do not read a wide range as a safe range or a narrow range as a bad one. Use the numbers to size the position and to know where you would lose, then check the real quotes.

Strangle calculator questions

Sources

• Fidelity and Cboe: long-strangle payoff mechanics (checked October 2026).
• Fidelity and Cboe: short-strangle risk boundaries (checked October 2026).