Strip Strangle
Sell Call + Sell 2 Puts
Positions in Chart: Sell 1 lot of 26000 CE + Sell 2 lots of 25600 PE. Spot price: 25800
Setup
Sell OTM Call + Sell 2 OTM Puts
When to Use
- Bearish bias with volatility decay
Market Outlook
Volatility Expectation↘Expected to Fall Sharply
Price Direction↘→Expected to Stay Flat or Fall Slightly
Risk & Reward
Breakeven PointMultiple breakeven points
Max Contract LossUnlimited downside
Max Position LossUnlimited
Strategy Details
Complexity LevelHigh Risk
DirectionNeutral to Bearish
VolatilityDecaying
Number of Legs3 Leg
Strategy TypeCredit
Hedging CapabilityNo Hedging or Naked
Description
A strip strangle is like a strangle but with an extra put sold, creating bearish bias
Example
If NIFTY is at ₹25,800, you sell a ₹26,000 Call for ₹100 and two ₹25,600 Puts for ₹90 each, receiving ₹280 total.
This information is for educational purposes only and should not be considered as financial advice. Always consult with a qualified financial advisor before making investment decisions. Data is constructed and is not actual. Calculations may have errors.
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