The Liz & Jenny Strategy Workshop

Strategy Workshop: How to Put On A Straddle

The Liz & Jenny Strategy Workshop

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

In this strategy workshop, Liz and Jenny explain the basics of a Straddle strategy. A Straddle is the simultaneous sell of a Call and Put option at the same strike to collect a credit.

You'll start by looking for a very liquid underlying that has high implied volatility rank (IV rank). Generally, we consider anything with an implied volatility rank of over 50% to be high.

When we trade Straddles we're hoping the implied volatility rank will contract, and the price of the underlying will remain relatively unchanged.

Typically, we will manage a Straddle more aggressively due to the larger credit received.

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