Short Straddle: The Market Neutral King

Best strategy when you expect the market to stay sideways (Range Bound). Ideally for 9:30 AM to 2:00 PM.

The Setup

  • Sell ATM Call.
  • Sell ATM Put.

Example: Nifty at 22,000. Sell 22,000 CE (₹100) and Sell 22,000 PE (₹100).
Total Credit: ₹200.

Payoff Profile

  • Max Profit: ₹200 (If Nifty closes exactly at 22,000).
  • Breakeven: 21,800 to 22,200. (Strike ± Total Premium).
  • Risk: Unlimited beyond breakevens.

Adjustment (Firefighting)

If Nifty moves to 22,100:

  1. Your PE Profit increases (good).
  2. Your CE Loss increases (bad).
  3. Solution: Shift the Straddle. Close the PE (book profit) and Sell a NEW PE at 22,100 to recenter the straddle.
Last Updated: January 25, 2026

*Disclaimer: NSE/BSE frequently revise Lot Sizes and Expiry Days (e.g., SEBI Circulars 2024/2025). Always check the latest circular on nseindia.com before trading.

Standard Disclosure: Investment in securities market are subject to market risks. Read all the related documents carefully before investing. The content provided here is for educational purposes only and does not constitute financial or investment advice. AlgoStraddle Academy is not a SEBI registered investment advisor. Trading options involves high risk and capital can be lost.