top of page
Description:
This is a sideways strategy consisting of a short position in an OTM call option with a strike price K1, and a short position in an OTM put option with a strike price K2 . This is a net credit trade. Since both call and put options are OTM, this strategy is less risky than a short straddle position. The flipside is that the initial credit is also lower. The trader’s outlook is neutral. This is an income strategy.
bottom of page