STRATEGY | Short Straddle |
MARKET OPINION | Neutral or stable |
MARKET POSITION | Sell a call and sell a put on the same commodity with the same expiration date and strike price |
OPTION STRATEGY
DEBIT/CREDIT | Net credit [premium received on both options] |
PROFIT POTENTIAL | Limited to the net credit |
PROFIT POINT | Any futures price between the [strike price minus the net credit] and the [strike price plus the net credit]; maximum profit point is when the futures price equals the strike price |
LOSS POTENTIAL | Unlimited [except to the extent that the futures price cannot fall below zero] |
LOSS POINT | Any futures price that is less than the [strike price minus the net credit] or greater than the [strike price plus the net credit] |
BREAK-EVEN-POINT | Two break-even points [strike price + net credit] or [strike price - net credit] |
MARGIN REQUIRED | Yes |
DELTA | - [Delta of call sold]
- [Delta of put sold] |
