Adjusted according to your risk tolerance. Der Short Straddle birgt im Gegensatz zum Long Straddle ein unbegrenztes Verlustrisiko. Ein Straddle (von englisch straddle für ‚Grätsche‘) ist eine Optionsstrategie.Es werden die beiden Varianten Long Straddle und Short Straddle unterschieden. Description. You sell something like 28 and a 26 delta Call and sell a 25 and a 23 delta Put. This is a combination of the covered call and cash-secured put strategies. A covered straddle is the combination of a covered call (long stock plus short call) and a short put. Short strangles are credit spreads as a net credit is taken to enter the trade. You buy 100 shares, you put aside enough cash for another 100 shares. Maximum profit for the short strangle occurs when the underlying stock price on expiration date is trading between the strike prices of the options sold. The concept is to increase the yield of the Covered Call by selling an OTM (lower strike) put. Components of the covered strangle. Buy stock; Sell call option; Sell put option ; The top two components represent the covered call aspect and the last is where we sell the cash-secured put. Covered Strangle (Covered Combination) This strategy is appropriate for a stock considered to be fairly valued. Limited Profit. You buy 100 shares of AMD at $10.11 and sell a June $11 call for 52 cents. This strategy consists of two parts: (1) short a call and long the underlying stock, and (2) short a put with sufficient cash to purchase the stock if assigned. We are looking to generate monthly cash flow while at the same time positioning ourselves to buy a stock at a “discount” should the share price expire below the put strike. We can follow either combination when wrapping our head around the covered strangle strategy. Here’s how I would think about the first. The short put is not “covered” as the strategy name implies, however, because cash is not held in reserve to buy shares if the put is assigned. 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