Tips to enter the Long Strangle Option Trading Position:
Continuing further from our earlier part on Profit & Loss Calculations for Long Strangle Options Trading, here are the details about when to enter and exit the Long Strangle option position.

An option trader should enter the Short Straddle Option Trading Position with the following tips:
- Being a safe option strategy with low cost limited risk, one can take the Long Strangle positions when there are earnings announcements, project bidding outcomes, or any such news or events which can result in a big price movements in the underlying stock price

- Since stock prices are more likely to move on news (rather than indices which are relatively less volatile and more stable), it is advisable to trade long strangle on stock options rather than index options

- Keep atleast 2-3 months of time to expiry else you may get hit very badly due to time decay which is fastest in the last month of expiry. Better to take a long strangle position with say 3 months to expiry and exit when there is 1 month left for expiry. (See Options Time Decay: Explained with Examples)

- Choose your OTM strike prices wisely - they should not be impractically way out of range to be achieved. Remember that they should be achievable strike prices although with a big price movement better than the monthly (2-monthly/3-monthly) normal volatility

- Keep the same expiry date for both the call and put option positions.

Tips to Exit Long Strangle Option Trading:

- Remember that you entered the Long Strangle Position with a hope of big price movements. If the news/event is yet to happen, don’t get tempted to close or exit the position for smaller profits. It is advisable to wait and hold onto the position till the event has actually occurred.

- If the expected price movements has already happened, and there is only 1 month (or less) remaining to the expiry, then its advisable to exit the long strangle position.

- If the expected event (earnings, news, etc.) has already occurred and there is no price movement in the underlying as expected, it is better to exit the Long strangle position unless there is anything else expected till time of expiry.

- Look for high volatility scenarios - if there are no chances of having highly volatile price movements as expected, don’t enter the Long Strangle or exit if already entered.

- Keep in mind the effect of price anomalies in terms of bid/ask spread prices while entering the long strangle as well as exiting the long strangle positions.

- Also, remember that stock prices consolidate after sometime. So once you have a profitable position on one side (upside or downside) after the expected price movement has happened, sell that profitable position. If prices have risen as expected, sell the call and hold onto put and vice versa. It is possible to see backtracking of the price levels after sometime, making the other held option giving you more returns

Let's head on to next part Greeks for Long Strangle Option: Delta, Gamma, Rho, Vega Theta