Sold Straddles vs. Sold Strangles

Posted on March 22nd, 2010 admin
Sold Straddles vs. Sold Strangles 5.00/5 (100.00%) 1 vote

If you are a straddle seller you have a greater maximum reward (credit for selling the options) but also a larger risk of losing all the reward and more if the stock moves too far from the strike price. If you are a strangle seller, you have a lower maximum reward (less time premium sold) but also a lower risk that the stock will move outside of the strangle strike window to lower the reward or even go to a deficit. The sold strangle has a lower potential profit than the sold straddle, however it offers greater protection since the share price must move further to result in a loss.

To receive ASX Option Recommendations or to learn more about straddles and strangles please request the complete Straddles and Strangles eBook by contacting us on 1300 368 316 or info@totaloptions.com.au

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