How to do adjustments in short straddle?
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How to do adjustments in short straddle?
The word short stands for “sell” in the stock market. So short straddle means, selling call or put options of same strike price and same expiry.
How to Adjust a Short Straddle:
Even though the strategy is the same for all, the adjustment strategies are different from person to person.
Actually, the adjustment part plays a major role in the strategy.
Few people in the market are actually charging more than 50000 just to teach the adjustment in option selling.
So, it is all about learning adjustments not simply learning strategies.
Selling options (Both call & put options) with the same strike price, quantity, and expiry is called short straddle strategy.
Short straddle strategy gives good returns compared to many of the option selling strategies.
A short straddle is profitable only when the market stays range-bound. One can make huge losses if the market moves in any one direction.
It is better to avoid this strategy when the market is in volatile condition.