Option Strategy #11: Short Straddle

Sell An At The Money Put And Call (Same Strike Price)

Use a Short Straddle when you think the market will not move sharply in either direction. You are

looking to profit from a flat market.

The profit potential is limited to the premium collected. At expiration the break even is equal to the

strike price plus or minus the net amount collected for the spread. The maximum profit is achieved

at expiration if the market is at the strike price.

The risk is unlimited in either direction, and having unlimited risk on both sides of this position

requires that this strategy be watched very closely.

Futures Traders Helping Future Traders