A short strangle options strategy is loved by traders looking to collect income. The setup involves selling a call and a put, out of the money. Generally the options will be out of the money at the same difference, but does not have to be. The max profit is achieve when both options expire worthless. This strategy has two break even points, and once the stock goes passed the break even points, then serious losses can occur.
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Option Contracts
Short Call
Short Put
Equity - Long
100 shares
Estimated Returns
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