Research Specials LIVE

Research Specials LIVE

Research Specials LIVE

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

A short straddle is a strategy comprised of selling an at the money put and an at the money call. Similar to a strangle, the short straddle benefits from a contraction in volatility and neutral price movement. At tastytrade, we manage straddles at 25% of the max profit and we manage strangles at 50% of their potential max profit. Since we use a duration-based management target to reduce volatility for strangles, should we also incorporate one for straddles?

The Study:
  • SPY
  • 45 Days to Expiraiton
  • 2005 – Present
  • 50 delta Straddles
  • Comparing Varying DTE Management Strategies

The longer we hold the straddle the greater the average P/L however the lower the daily P/L. When we manage straddles at 14 days, we see increased cumulative performance and lower portfolio volatility.

Research Specials LIVE More installments

See All »

Latest tastytrade Videos As of July 16

Most Shared From the last 30 days