Long strangle on Sensex
Buy an out-of-the-money call and an out-of-the-money put. Cheaper than a straddle, but needs a bigger move to pay off. Shown per lot of 20 with illustrative numbers.
Contract basics. Sensex lot size: 20. Sensex has weekly options on BSE expiring every Thursday, so this example uses 7 days to expiry. Strikes in this example are rounded to the 100-point strike interval.
A structure for a view that the index will move sharply in either direction.
| Leg | Premium per unit | Cash flow |
|---|---|---|
| Buy 1 lot 83,500 CE | ₹139.47 | −₹2,789 |
| Buy 1 lot 80,500 PE | ₹101.35 | −₹2,027 |
Profit and loss at expiry
For the whole position, before charges.
Premiums are theoretical Black–Scholes values from round, illustrative inputs, not market prices. Charges and margin are not included.Price a single leg with your own numbers.
Frequently asked questions
What is the maximum loss of a long strangle on Sensex?
In this illustrative example, ₹4,816 per set of legs (lot size 20), before charges.
What is the lot size of Sensex options?
20 units per lot at the time of writing. Lot sizes are revised by the exchange from time to time; check the current size before trading.
When do Sensex options expire?
Sensex has weekly options on BSE expiring every Thursday, so this example uses 7 days to expiry.
Strangle or straddle: what is the difference?
A strangle uses different strikes outside the current level, so it costs less but needs a larger move to break even.
What is the maximum loss on a long strangle?
The combined premium paid, if the index ends between the two strikes.