Strangle

A strangle is similar to a straddle.  You buy a put and also buy a call – both out-of-the-money and at different strike prices.

It is a speculative trade based upon a prediction that the underlying stock will move dramatically.  This direction of the price move can be up, or down, as long as it happens before the options expire and as long as it is a very dramatic move.

Strangles are a good trade if you can accept a lower probability of return or if you are disciplined enough to get out as soon as you make a reasonable return on the position well before expiration. 

The premium for a strangle will be less than the premium for the straddle, but like a straddle, the time-value decay doubles because it applies to two options simultaneously.