What is a short straddle option strategy?
A) A long call option + long put option with the same strike prices
B) A short call option + short put option with the same strike prices
C) A long call option + short put option with the same strike prices
D) A short call option + long put option with the same strike prices

Question

Quizplus · Accepted Answer

A short straddle is a neutral options trading strategy that involves selling a call option and a put option with the same strike price and expiration date. This means the trader is betting that the underlying stock will not move significantly in either direction. Selling both options creates a limited profit potential, but unlimited risk if the stock moves significantly in either direction. The short straddle is best used in a market that is expected to remain relatively stable.

What Is a Short Straddle Option Strategy