A long strangle uses two options contracts to bet that a stock will move sharply in either direction

A long strangle is an options strategy where you buy an out-of-the-money call option and an out-of-the-money put option on the same stock, with the same expiration date. You profit if the stock price moves far enough in either direction before expiration — up past the call strike, or down past the put strike. You lose money if the stock stays between those two strikes.

On WeBull, you place a long strangle by opening two separate options orders: one to buy a call, one to buy a put. WeBull does not have a single "strangle" order type, so you enter them as individual legs. The strategy costs money upfront (the premiums you pay for both contracts) and has a defined maximum loss if the stock does not move enough.

Key Takeaways

  • A long strangle requires buying a call option above the current stock price and a put option below it, both expiring on the same date.
  • You place the trade on WeBull by entering two separate buy-to-open options orders rather than a single combined order.
  • Your maximum loss is the total premium you paid for both contracts; your profit grows if the stock moves far enough in either direction.
  • The stock must move past your break-even points (call strike plus call premium, or put strike minus put premium) before you make money.

Step-by-step: entering a long strangle on WeBull

Start by navigating to the options chain for the stock you want to trade. Tap or click the stock symbol, then select the options tab. Choose your expiration date — this is when both legs of your strangle expire, so pick the same date for both the call and put.

For the call leg, select a strike price above the current stock price. Tap that strike to open the order entry screen. Set the order to "Buy to Open," confirm the quantity (usually one contract), and review the premium you will pay. Tap "Place Order" or "Preview Order" depending on your settings. Do not submit yet if you want to check the put leg first.

Return to the options chain and select the same expiration date. For the put leg, select a strike price below the current stock price. Tap that strike, set it to "Buy to Open," and review the premium. Once you have both orders ready, you can submit them one after the other, or submit them simultaneously if WeBull allows it in your account settings.

Choosing strike prices for your strangle

The wider apart your strikes, the less premium you pay upfront but the more the stock has to move for you to profit. A tight strangle (strikes close together) costs more but requires less movement. A wide strangle (strikes far apart) costs less but needs a bigger price swing.

Most traders choose strikes that are one to three steps away from the current price in each direction. If a stock is trading at $100, you might buy the $95 put and the $105 call. If you expect high volatility, you might go wider — $90 and $110. If you expect moderate movement, you might go tighter — $98 and $102.

Check the implied volatility (IV) of the options you are looking at. Higher IV means the premiums are more expensive, so your break-even points are further away. Lower IV means cheaper premiums but less room for error.

Understanding your break-even points and maximum loss

Your break-even points are where you stop losing money and start making it. For the call side, break-even is the call strike price plus the premium you paid for the call. For the put side, break-even is the put strike price minus the premium you paid for the put.

If you bought a $105 call for $2 and a $95 put for $2, your break-even points are $109 on the upside (105 + 2 + 2) and $91 on the downside (95 − 2 − 2). The stock must close above $109 or below $91 at expiration for you to make money.

Your maximum loss is the total premium you paid for both contracts. If you paid $2 for the call and $2 for the put, your maximum loss is $400 per contract (since one options contract covers 100 shares). This loss occurs if the stock closes between your two strikes at expiration.

Closing your strangle before expiration

You do not have to hold a strangle until expiration. If the stock moves in your favor, you can close one or both legs early to lock in profit. On WeBull, navigate back to the options chain for the same expiration date, find the strike you bought, and place a "Sell to Close" order for the quantity you own.

Many traders close the profitable leg early and let the losing leg expire worthless, or close both legs once they hit a profit target. You can also close just the call or just the put if one side is winning and the other is losing, though this turns your strangle into a different strategy (a covered call or protective put).

If you close early, you avoid the risk of a sudden price reversal on expiration day and lock in whatever profit or loss you have at that moment. The trade-off is that you give up any additional profit if the stock continues moving in your favor.

Common mistakes when trading strangles on WeBull

Forgetting to check the expiration date on both legs is a frequent error. If you accidentally buy a call expiring in one month and a put expiring in a different month, you no longer have a strangle — you have two unrelated trades. Always confirm both orders show the same expiration date before submitting.

Choosing strikes that are too close together is another trap. This reduces your upfront cost but means the stock has to move a lot just to reach break-even. Many new traders underestimate how much movement a stock needs and end up losing money even when the stock does move.

Holding through expiration without a plan is risky. If the stock is near one of your strikes at expiration, assignment can happen, and you may end up with shares or a short position you did not intend. Close or roll your position a few days before expiration if you want to avoid this.

Frequently Asked Questions

Can I place a strangle as a single order on WeBull, or do I have to enter two separate orders?

WeBull does not have a built-in strangle order type, so you enter the call and put as two separate "Buy to Open" orders. You can submit them one after the other or, depending on your account settings, close together in time. They will show as two separate positions in your portfolio.

What happens if the stock price is exactly at one of my strike prices when the options expire?

If the stock closes exactly at a strike price, that option is at-the-money and typically expires worthless (though some brokers may assign it). The other leg, if it is out-of-the-money, also expires worthless. You lose the total premium you paid for both contracts.

Can I adjust my strangle after I have opened it?

Yes. You can close one or both legs early, or you can "roll" the position by closing the current orders and opening new ones with a different strike or expiration date. Rolling lets you extend your trade if you still expect movement but need more time.

What is the difference between a long strangle and a long straddle?

A straddle uses the same strike price for both the call and put, while a strangle uses different strikes. A straddle costs more upfront but requires less stock movement to profit. A strangle costs less but needs bigger movement. Both bet on volatility in either direction.

Do I need margin to trade a long strangle on WeBull?

No. A long strangle is a debit spread — you pay the premium upfront and your loss is capped at what you paid. You do not need margin. However, if you close one leg and hold the other, you may trigger margin requirements depending on which leg you keep open.