Short Strangle
In plain English
Like a short straddle but with a wider safe zone. You sell an OTM call and put, giving the price more room to wander before you lose. Still has open-ended risk on a big move.
How it's built
Sell an OTM call and OTM put — a wider safe zone than a short straddle.
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₹14,043
Max lossUnlimited
Net premiumCr ₹14,043
Breakevens—
When to use it
Range-bound expectation, high IV. Wider breakevens than a short straddle.
Max profit
Total premium received.
Max loss
Unlimited on both sides.
Common mistakes
- Selling too tight.
- No defined exit or hedge.