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Comparision (SHORT STRADDLE VS SHORT STRADDLE)

 

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  SHORT STRADDLE SHORT STRADDLE
About Strategy

Short Straddle Option strategy

This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an

Short Straddle Option strategy

This strategy is just the opposite of Long Straddle. A trader should adopt this strategy when he expects less volatility in the near future. Here, a trader will sell one Call Option & one Put Option of the same strike price, same expiry date and of the same underlying asset. If the stock/index hovers around the same levels then both the options will expire worthless an ..

SHORT STRADDLE Vs SHORT STRADDLE - Details

SHORT STRADDLE SHORT STRADDLE
Market View Neutral Neutral
Type (CE/PE) CE (Call Option) + PE (Put Option) CE (Call Option) + PE (Put Option)
Number Of Positions 2 2
Strategy Level Advance Advance
Reward Profile Limited Limited
Risk Profile Unlimited Unlimited
Breakeven Point Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium

SHORT STRADDLE Vs SHORT STRADDLE - When & How to use ?

SHORT STRADDLE SHORT STRADDLE
Market View Neutral Neutral
When to use? This strategy is work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset. This strategy is work well when an investor expect a flat market in the coming days with very less movement in the prices of underlying asset.
Action Sell Call Option, Sell Put Option Sell Call Option, Sell Put Option
Breakeven Point Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium Lower Breakeven = Strike Price of Put - Net Premium, Upper breakeven = Strike Price of Call+ Net Premium

SHORT STRADDLE Vs SHORT STRADDLE - Risk & Reward

SHORT STRADDLE SHORT STRADDLE
Maximum Profit Scenario Max Profit = Net Premium Received - Commissions Paid Max Profit = Net Premium Received - Commissions Paid
Maximum Loss Scenario Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received
Risk Unlimited Unlimited
Reward Limited Limited

SHORT STRADDLE Vs SHORT STRADDLE - Strategy Pros & Cons

SHORT STRADDLE SHORT STRADDLE
Similar Strategies Short Strangle Short Strangle
Disadvantage • Unlimited risk. • If the price of the underlying asset moves in either direction then huge losses can occur. • Unlimited risk. • If the price of the underlying asset moves in either direction then huge losses can occur.
Advantages • A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option . • A trader can earn profit even when there is no volatility in the market . • Allows you to benefit from double time decay. • Trader can collect premium from puts and calls option .

SHORT STRADDLE

SHORT STRADDLE