Neutral Options Strategies
The beauty of options is that you don't need to try and predict future market movement. With the right strategies, you can trade within a neutral range and still profit.
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Short Straddle

A short straddle is a multi-leg, neutral strategy with undefined-risk and limited profit potential. Short straddles have no directional bias and capitalize on a decrease in volatility and minimal movement from the underlying stock.
Short Straddle
Kirk Du Plessis
Apr 19, 2021

Short straddles are aggressive premium selling strategies where you sell both the ATM call and ATM put option at the same strike price with the same expiration date. This maximizes the credit received and is best used with ultra-high IV stocks. Because of the undefined risk nature of this strategy, it's best to use this sparingly (again only with great setups). We will only trade 1 to 2 straddles in our overall portfolio at a time. Profit taking on this strategy is much quicker and you'll look to close out winning trades at 25-50% of max profit to conserve capital.

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Long Straddle
A long straddle is a multi-leg, risk-defined, neutral strategy with unlimited profit potential. Long straddles have no directional bias but require a large enough move in the underlying asset to exceed the combined break-even price of the two long options.

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Short Straddle

A short straddle is a multi-leg, neutral strategy with undefined-risk and limited profit potential. Short straddles have no directional bias and capitalize on a decrease in volatility and minimal movement from the underlying stock.
Short Straddle
Kirk Du Plessis
Apr 19, 2021

Short straddles are aggressive premium selling strategies where you sell both the ATM call and ATM put option at the same strike price with the same expiration date. This maximizes the credit received and is best used with ultra-high IV stocks. Because of the undefined risk nature of this strategy, it's best to use this sparingly (again only with great setups). We will only trade 1 to 2 straddles in our overall portfolio at a time. Profit taking on this strategy is much quicker and you'll look to close out winning trades at 25-50% of max profit to conserve capital.

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Next lesson
Long Straddle
A long straddle is a multi-leg, risk-defined, neutral strategy with unlimited profit potential. Long straddles have no directional bias but require a large enough move in the underlying asset to exceed the combined break-even price of the two long options.
Neutral Options Strategies
The beauty of options is that you don't need to try and predict future market movement. With the right strategies, you can trade within a neutral range and still profit.
Lesson
1
of
7
Next Lesson
Lessons
Exit Course