SHORT STRADDLE (Sell Straddle) | neutral strategy

Short Straddle

Example: Sell 1 call; sell 1 put at same strike
Market Outlook: Neutral
Risk: Unlimited
Reward: Limited
Increase in Volatility: Hurts position
Time Erosion: Helps position
Break-Even Point (BEP): Two BEPs 1. Call strike plus premium received 2. Put strike minus premium received

The short straddle - a.k.a. sell straddle or naked straddle sale - is a neutral options strategy that involve the simultaneous selling of a put and a call of the same underlying stock, striking price and expiration date.

Short straddles are limited profit, unlimited risk options trading strategies that are used when the options trader thinks that the underlying securities will experience little volatility in the near term.

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