An advantage of a short straddle is that it provides the option writer with income from two separate sources.

Question

Quizplus · Accepted Answer

A short straddle involves selling both a call option and a put option at the same strike price and expiration date. This generates income from both the premium received for selling the options and from any potential decline in the stock price, as the options will expire worthless if the stock remains at the same price. Therefore, a short straddle does provide the option writer with income from two separate sources.

An Advantage of a Short Straddle Is That It Provides