A strangle (stgl) can be either of the following:
Long strangle
A long strangle means you are buying the strangle. This involves buying a call option (long call) and buying a put option (long put), both with different strikes but the same expiry date and notional.
Short strangle
A short strangle means you are selling the strangle. This involves selling a call option (short call) and selling a put option (short put), both with different strikes but the same expiry date and notional.
Strangles are commonly described as 25 delta, 15 delta and so on.
Volatility quotes for strangles are used as benchmarks to create a volatility surface.
Why buy a strangle?
Like the Straddle, the long strangle position expresses a view that the prices will move (in which direction is irrelevant). However, because the price needs to move further than with a straddle the strangle is cheaper.
Pricing a strangle in SDX Commodities & Energy
When pricing a strangle note the following:
The strangle instrument in the Single Option page is calculated according to FX conventions, and subsequently it is only available for precious metal assets. For all other assets you should use the traditional commodity 2-Vol Strangle instead, which is calculated according to CM conventions.
You can only enter it automatically in the Single Option page. To price a strangle in the Portfolio page, you need to build it manually out of its individual components.