Straddles are arguably the most aggressive short premium strategy. They typically have the tightest breakevens, which translates to the largest risk with big moves in either direction.
Today, Tom and Tony compare theto a Reverse Big Lizard. This Lizard sets up as a short Straddle, with long put below the Straddle strikes. If done correctly, there is no risk to the downside, provided that the credit received is greater than the spread width.
The historical results favor the Straddle with regards to P/L and success rate. However, there are some important metrics that do indicate the losses that are spared to the Reverse Big Lizard.
Check out the video for Tom and Tony's full analysis and takeaways!