Strangle

A strangle pairs an out-of-the-money call with an out-of-the-money put on the same expiration — same wager as a straddle, movement over direction, but built with cheaper strikes set apart from the stock price.

The trade-off is explicit: a strangle costs less than a straddle, so the maximum loss is smaller, but the stock must travel farther before either leg has intrinsic value. Sold rather than bought, the short strangle collects both premiums and profits if the stock stays inside the strikes — with undefined risk on both tails.