Short Straddle
The opposite: you're sure the market will freeze. You sell both sides and collect cash while price sits. A big move brings a large loss, so this is for experienced traders.
How the Short Straddle works
Max profit is if price closes exactly at the strike. Any big move produces a growing loss, so it needs strict risk management. It gains from falling IV and theta decay.
Placing the strike at GEX levels
Put the strike at Max Pain / the Gamma Flip where the market gravitates. The ideal regime is positive GEX (compressed volatility) with high IV at entry (you sell expensive volatility). Mind the unlimited risk.
Max Pain and the Gamma Flip are computed live in the GEX Terminal — Position Builder.
When to open, the Greeks and managing the position
Open it on very calm markets with inflated IV — pros often enter right after earnings season, when volatility drops sharply and accelerates the sold options' decay. Max profit = total credit at the strike, breakevens = strike ± credit.
Greeks: strong positive theta, negative vega. Management: the loss on a big move is unlimited — stops/delta-hedging are mandatory; the defined-risk version is the Iron Butterfly (with wings).
FAQ
The loss on a big move is unlimited. An Iron Butterfly (with wings) is often safer.
If price closes at the strike at expiry.
Build the Short Straddle on live BTC and ETH quotes in the Position Builder.
Open the Position BuilderRelated strategies
Information is for educational purposes only and does not constitute investment advice. Options trading carries high risk.