A short straddle is a two-legged spread that offers an initial upfront credit, but carries the risk of potentially heavy (in fact, technically unlimited) losses. The strategy is intended to profit ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

An option gives traders the right, but not the obligation, to trade the underlying asset that it is linked to. Whether the underlying asset moves up or down in value, an options straddle is a trading ...

A short straddle is a neutral options strategy that entails writing uncovered, or naked, calls and puts simultaneously, at the same strike price and expiration, on a certain underlying stock. With a ...

We recently published a performance review of at-the-money (ATM) NDX straddles with between one and five days left to expiration. One finding was that consistent sellers of 3-Day, 4-Day, and 5-Day NDX ...

Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors. The short straddle is dangerous because, well for one thing, both sides are short. Making things even riskier, ...

The financial markets have experienced strong volume growth in the short- dated index option arena. This paper explores the performance of short-dated index options versus the subsequent price move in ...

Buying a straddle profits from significant price swings regardless of direction. Selling a straddle profits when the stock price remains stable near strike price. Straddle buying is risky before ...