Russell 2000 ETF (IWM) is currently showing below average volatility with an IV Percentile of 13% and an IV Rank of 16.49%.

Today, we’re going to look at a long strangle trade due to the low IV percentile, that will profit if IWM makes a big move in either direction in the next few weeks.

A long strangle profits in two ways: from a rise in implied volatility, or from the stock moving outside the expected range by expiration.

Low implied volatility works in the buyer’s favour at entry. It means the options are relatively cheap and the market is pricing in a narrow expected range, so the stock has less distance to travel before the trade moves into profit.

The risk is that IV stays…