Long Strangle with Puts only

E

earth_imperator

A Long Strangle is usually created by using Call plus Put.
Is it possible to create it with just Puts only?

I know it can be created! :) Sort of... Maybe I made an important discovery... Dunno yet... :)
I just wanted to know whether anyone else already knows this secret knowledge for the practice? :)
Prove it! :)

Moderator please change the title to "Long Strangle with Puts only", as I can neither modify the title nor delete the post.
 
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Here's my practical method of extending a Put Spread (consisting of a ShortPut plus a LongPut) sometime later to an extended construct (still an all-Put-only construct) that shows a similar PnL diagram like a classic LongStrangle:

This is the initial PutSpread (consisting of a ShortPut and a LongPut), Spot=1.25 DTE=60 :
https://optioncreator.com/sts3grj

After say 5 days (ie. now DTE=55) the Spot rises to 1.50, and we decide to open another LongPut with Strike=1.50 (ie. ATM) :
https://optioncreator.com/staos2t
FYI: in this entry window we re-enter everything with DTE=55 as the online tool does not handle well differing DTEs (ie. 60 and 55 mixed).

Now watch the PnL diagram: it's as said like that of a LongStrangle :) Voila!
And the other good news is: it now is completely out of the woods, ie. no loss possible at all anymore as one is completely in the winzone, regardless wherever the spot migt go in the remaining 55 days till expiry! And it now covers also the left side (left of strike 1) with a big win possibility similar to the right side (right of strike 1.5)!

What a mighty construct, IMO! :)
Enjoy option folks this my Easter egg present to you all out there on the globe! :)

I have to find a good name for this construct yet. Suggestions welcome!
What about "PutSpreadLongStrangle"? :)

Here the screenshots of the above links:
Before:
PutSpreadLongStrangle_before.png


After:
PutSpreadLongStrangle_after.png
 
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2rosy said:
The pnl charts you posted don't make sense. Unlimited upside if stock goes up?
More...
Nope, it's due to the fact that it's very deep ITM :) At spot 35 (ie. the strike of the ShortPut)
the PnL line stops rising and instead becomes horizontal... Here's the full chart: https://optioncreator.com/stsxfaz
I had zoomed-in to the practical range of spot 0 to spot 2.50 for an actual spot of 1.25.
Ie. adjust the max spot value for the right side of the x axis, as was also mentioned in the posting.
 
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