The Short Strangle (or Sell Strangle) is a neutral strategy wherein a Slightly OTM Call and a Slightly OTM Put Options are sold simultaneously of same underlying asset and expiry date. This strategy can be used when the trader expects that the underlying stock will experience a … Here is the detailed Long Strangle Vs Short Strangle comparison: Short strangle is a position created by selling a higher strike call option and selling a lower strike put option with the same expiration date. Short Strangle - Introduction The Short Strangle, is a very similar option trading strategy to a Short Straddle and is the complete reversal of a Long Strangle.

Short Strangle Payoff Market Assumption: When trading a short strangle, you should have a neutral/range bound market assumption. A Short Strangle is where you are short one put option with a lower strike price for every one short call option at a higher strike price. By moving the short strangle up or down you can make it neutral with slight directional tilt. The Max Gain is … Summary Short strangle options trading strategy is an excellent strategy to be deployed when the investor is expecting little to no volatility in the market. Learning the Long Strangle first makes the Short Strangle easier to understand. The investor is looking for a steady stock price during the life of the options. A short strangle consists of selling call and a put option in the same underlying security, strike price, and expiration date. The Max Loss is uncapped as the market moves in either direction.

Please Read About The Long Strangle. Selling a call and selling a put with the same expiration, but where the call strike price is above the put strike price is known as the short strangle strategy. Point A represents the selling of the put and point B the sale of the call on the chart below. Both options have the same expiration date. With a short strangle, credit is received and reaches maximum profit when the stock stays within the range of the two strike prices. But generally a short strangle is a neutral strategy. With all these comparisons, you should be able to filter the ones that work the best for you. Typically both options are out-of-the-money when the strategy is initiated. Outlook. Apart from the Long Strangle Vs Short Strangle strategies, there are more than 25 comparisons of each of these strategies with other option strategies. In spite of no price movements, the investor can make profits using the short strangle.