Short Straddle
#pixarts.trade , #safebull
Market View – Range Bound, Not moving The Trade – Sell a Put and Call at the same strike near the stock price. Your view is that the stock will not go up or down Premium – Receive Margin – Required When To Do Pros Cons Time and Volatility Max Loss : Very high Max […]
Market View – Range Bound, Not moving
The Trade – Sell a Put and Call at the same strike near the stock price. Your view is that the stock will not go up or down
Premium – Receive
Margin – Required
When To Do
- When the stock stays still and expires near the sell option strike.
- Avoid trending markets
- Avoid selling low IV
Pros
- Make money if nothing happens
- Delta Neutral – Immune to small moves
Cons
- High loss if market moves a lot in one direction
Time and Volatility
- Gains time value every day
- Loses if IV goes up
Max Loss : Very high
Max Profit : Call premium + Put premium