Short Straddle
In plain English
The opposite of a long straddle — you bet nothing much happens. You sell both a call and a put and collect rich premium. You win if the price stays pinned, but a big surprise move can hurt badly. Experts only.
How it's built
Sell an ATM call and put — collect rich premium, profit if the price stays pinned.
Illustrative payoff at expiry on a NIFTY-like underlying (spot 24,000, 7d, 13% IV). The shape is the point — open it in the Strategy Lab to tune spot, time and volatility live.
Max profit₹22,448
Max lossUnlimited
Net premiumCr ₹22,448
Breakevens23,655 / 24,345
When to use it
Expecting low realised volatility / range-bound markets. Sell when IV is HIGH.
Max profit
The total premium received (if price expires at the strike).
Max loss
Unlimited on both sides — requires strict risk management and margin.
Common mistakes
- No stop-loss or hedge — a gap move can be devastating.
- Selling in low IV for thin premium.