Worksheet:

Follow Along
Section 7: Long Strangle Combination

The stock is Boeing, the ticker is BA, and the date is September 18, 2017.
The stock is right around $253 at the time. I am expecting a very large
move outside of $253 so I will put on a strangle. I will buy one of the
JAN 260 calls and I will pay $9.225 and at the same time I will buy one
of the JAN 245 Puts for 9.19. Remember the stock is at 253, my Call is
above that level and my Put is below that level making the long
strangle.  If we look at the chart of Boeing here, it has a nice uptrend
and we can see at the light line is where the PNL starts. All of a sudden
Boeing is starting to move up aggressively. Remember I don't know the
direction, I just know I need my stock to move up a lot further from
where it was. So you are seeing the PNL jump as a result of this and
that is what a Long Strangle allows you to do.
 Long Strangle Combination
Buy: 1 BA
Expiration: JAN
Strike Price: 260 Call

Option Price: 9.225

Buy: 1 BA
Expiration: JAN

Strike Price: 245 Put 

Option Price: 9.15

Unlimited
Max Gain
Formulas

Max Loss (Call Premium + Put Premium) X 100

Breakeven (Up) Call Strike + Put Premium + Call

Premium

Breakeven (Down) Put Strike - Put Premium - Call

Premium
Calculate the Formulas

Max Loss

Max Gain

Breakeven (Up)

Breakeven (Down)

BA Price at
Expiry

Net Result