Strategy - BUY STRANGLE (details below)

• bullish
• bearish
• neutral
• volatile
  • expect prices to be very volatile
  • expect prices to be volatile
  • moderately expect prices to be volatile

Strategy Implementation
Put option is bought with a strike a and a call option is bought with a strike b.

Upside Potential
Unlimited - should the market fall or rise greatly.

Downside Risk
Limited to the two premiums paid. [If the investor would like to reduce the premiums paid still further, a short butterfly might be interesting].

Margin
Not required

Comment
Position loses value with passage of time as time value decreases on options.