The differences between straddle and strangle can be understood with the help of the following table:
| Aspect | Strangle | Straddle |
| Strike Prices | Different strike prices for call and put options. | Same strike price for call and put options. |
| Upfront Cost | Generally lower due to wider strike price difference. | Generally higher due to closer strike price. |
| Profit Potential | Requires larger price movement for profitability. | Requires smaller price movement for profitability. |
| Loss Potential | Limited to the total premium paid. | Limited to the total premium paid. |
| Market Expectations | Expects high volatility, uncertain about direction. | Expects high volatility, significant price movement anticipated. |
| Use Case | Uncertain about the direction of price movement. | Expects significant price movement, uncertain about direction. |
| Risk Tolerance | Tolerates higher risk for potentially larger gains. | Tolerates somewhat lower risk for potentially smaller gains. |
| Maximum Profit | Lower than straddle due to wider strike difference. | Higher than strangle due to closer strike. |
| Maximum Loss | Limited to the total premium paid. | Limited to the total premium paid. |