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Short straddle calculator
maximum premium, minimum room

A short straddle sells the call and the put at the same strike, collecting the largest credit of any two-leg position. Maximum profit occurs only if the underlying finishes exactly at the strike, and the position gives back that credit steadily as price moves in either direction. It is the purest bet available that nothing much is about to happen.

Outlook: Neutral — expecting almost no move

Max profit

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best case at expiry

Max loss

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worst case at expiry

Breakeven

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where the trade turns even

Net debit / credit

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to open the position

Your short straddle

Per-share premiums. One contract = 100 shares.

Underlying price

Short call @ strike

Premium collected

Short put @ strike

Premium collected

Contracts

100 shares per contract

Profit at expiry Loss at expiry Breakeven Strikes & spot

How a short straddle pays

Total credit = call premium + put premium Max profit = total credit x 100 x contracts (only at the strike) Upper breakeven = strike + total credit Lower breakeven = strike - total credit Max loss = unlimited above; strike - credit below

The largest credit, the smallest range. At-the-money options carry the most extrinsic value, which is why this collects more than a strangle and profits across a narrower band.
Peak profit is a single price. Only an expiry exactly at the strike keeps the whole credit. Every other outcome gives some back.
Gamma risk is at its worst here. At-the-money short options have the highest gamma, so the delta flips fastest precisely where the position sits.
Earnings are the classic trap. IV is high before the event because a move is expected. Selling it collects a rich credit and takes the exact risk the market is pricing.

Worth naming. A short straddle carries unlimited upside risk and near-unlimited downside risk for a fixed, capped reward. It is the most concentrated form of short-volatility exposure available in two legs, and it is routinely sold by traders who have only seen it work. Before opening one, price what a move of two or three times the expected move would cost - not what it collects. An iron butterfly expresses the same view with the tails bought back.

What this does not model

Every figure here is the payoff at expiry. Before then your position is marked at market prices that still carry time value, so a trade can show a loss while sitting exactly where you wanted it — falling implied volatility alone will do that.

Short legs carry assignment risk. American-style options can be exercised at any time, most commonly on in-the-money calls just before an ex-dividend date. The diagram assumes you hold every leg to expiry.

For the live version — real Greeks, current marks and what-if scenarios against actual chain data — that is what the GreeksView desk does, in your browser, on your own broker keys.

Frequently asked questions

What are the breakevens on a short straddle?

The strike plus and minus the total credit. Selling the 100 call at $4.00 and the 100 put at $3.80 collects $7.80, so the trade profits between $92.20 and $107.80 at expiry.

Short straddle or short strangle?

The straddle collects more premium over a narrower range; the strangle collects less over a wider one. The strangle finishes fully profitable far more often, which is why it is the more common of the two.

What is the margin requirement?

Substantially more than the credit, because the risk is undefined. Requirements also expand as the position moves against you, which can force a close at the worst moment - check your broker before sizing.

Can both legs be assigned?

Not usefully at once - only one can be in the money at expiry. But either can be assigned early while the trade is open, most often a short call before an ex-dividend date, leaving you short stock.

Are commissions included in these numbers?

No — every figure is gross. On multi-leg positions this matters more than people expect: four legs to open and four to close is eight commissions against what may be a couple of hundred dollars of credit. Check your broker's per-contract rate against the max profit shown here before deciding a trade is worth putting on.

Run this against a live chain

GreeksView builds positions from real option chains with live Greeks, gamma exposure and what-if scenarios — in your browser, on your own broker keys.

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