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neutral strategies

Short Strangles

Analyzing the risk profile of a short strangle

XX Welcome to Short Strangles!

Key Things To Remember As A Beginner:

  • strangles are a combination of an
    and an OTM
  • Strangles carry risk above and below a central profit zone
  • Wider
    collect less
    but have a higher
  • Narrower strikes collect more credit but have a lower POP
  • Short strangles profit when option prices decrease
  • They lose if option prices increase

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neutral strategies