Strangle

Buying an out-of-the-money call and put to profit from a large move.

A strangle buys a call and put with different out-of-the-money strikes, costing less than a straddle but requiring a bigger move to profit. Like a straddle, it is a volatility bet that loses value if the price stays range-bound and both options expire worthless.

He set up a cheaper strangle, buying out-of-the-money calls and puts before the earnings swing.