What is a Short Straddle?
A Short Straddle means you sell both a Call AND a Put at the same ATM strike. You collect premium from both sides and profit if the stock stays near its current price at expiry. If it moves sharply in either direction, losses can be very large. This strategy has unlimited risk on both sides.
Nifty at ₹22,000. No major events this week. You sell the 22,000 CE for ₹150 and the 22,000 PE for ₹140. You collect ₹290 × 75 = ₹21,750 upfront. Your profit zone: Nifty staying between 21,710 and 22,290 at expiry. Every quiet day earns you money from double theta decay.
⚠️ Risk Warning: A Short Straddle has UNLIMITED risk in BOTH directions. This strategy requires active management, strict stop-losses, and significant experience. Beginners should use the Iron Condor instead — same concept with completely defined, capped risk.
At a Glance
Max Profit
Total Premium Received
Max Loss
Unlimited both directions
Breakeven
Strike ± Total Premium
Type
Credit · High Risk
| Action | Type | Strike | Expiry | Qty |
|---|---|---|---|---|
| Sell | Call (CE) | ATM Strike | 7–21 DTE | 1 Lot |
| Sell | Put (PE) | Same Strike | Same | 1 Lot |
P&L Simulator
Short Straddle
📊 Short Straddle — Payoff Chart + P&L Calculator
Index Price: 22000 · Call Premium Received: 150 · Put Premium Received: 140 · Lot Size: 75 · Price at Exit: 21900
When Should You Use This Strategy?
✓ When to Use / ✕ When to Avoid / ◉ IV / ◷ DTE
4 use items · 3 avoid items
