Key product features
Benefit from both positive and negative exchange rate moves.
There are two predetermined levels: Base Rate 1 and Base Rate 2.
Cheaper than the Straddle.
Unlimited profits.
Upfront premium.
Volatility trade.
Product description/scenario
A Strangle is a simultaneous purchase of Vanilla Call and Put Options with the same expiry and notional but with different strikes.
Like the Straddle, the Strangle allows its owner to benefit from the volatility of a currency pair.
Example trade profile
Payout profile at expiry
Payoff description
If spot at expiry is:
At or below Base Rate 1 (1.2500) the client can sell EUR / buy USD at Base Rate 1 (1.2500).
Between Base Rate 1 (1.2500) and Base Rate 2 (1.3500), the client has the option but not the obligation to transact in the market.
At or above Base Rate 2 (1.3500), the client buys EUR, sells USD at Base Rate 2 (1.3500).