The Short Strangle
is an options strategy similar to the Short Straddle
, with one difference: the strikes of the sold options are different (you sell a Call
with a higher strike and a Put
with a lower strike)
The strategy will generate a profit if the stock price stays between the two strikes by the expiry date.
Compared to the Short Straddle
, the Short Stangle
has a lower profit, but higher probability of being profitable.