A short straddle is an options strategy where you sell both a call and a put at the same strike price, typically at-the-money. This trade works best in neutral markets — when you expect the ...

A straddle refers to an options strategy in which an investor holds a position in both a call and a put with the same strike price and expiration date.

Short Straddle: A strategy where traders sell both a call and a put option at the same strike price and expiration date. This strategy profits when the underlying asset stays flat.

For example, a trader may buy an at-the-money XYZ $400 20-Sep-2024 call option for $30 and buy an at-the-money XYZ $400 20-Sep-2024 put option for $23. The net premium paid for the straddle is $30 ...

Some of the more popular earnings-focused options strategies include “earnings straddles,” directionally-focused naked options and calendar spreads.

One idea was to combine long NDX option positions with short dated short straddles. A first run at this suggestion yielded promising results.

This makes a long straddle a viable strategy for investors who would like to exploit short-term trading opportunities but do not want to risk an undefined sum of money.