Strangle is the purchase or sale of a call and a put on either side of the current market price. The options have the same expiration months but different strike prices.
Applying "Strangle" to Securities Exams:
An investor would purchase a strangle when they expect a large amount of volatility in the underlying security or index. Alternatively an investor would sell a strangle when they expect lower volatility in the underlying security or index. These are similar market attitudes as those of an investor who purchases or sells a straddle. However, a strangle will have lower premiums and less opportunity for exercise than the options in a straddle.