Anticipations
This market outlook anticipates very little movement in the underlying asset.
Characteristics
Limited profit / unlimited loss.
Max profit - limited to the net credits received.
Max loss - unlimited.
Creating
Sell call option and put
option with same strike price.
Example
Security(QQQ) price - $35
Short 1 QQQ 35 Call - $2.3
Short 1 QQQ 35 Put - $2
Max profit = $(2.3 + 2) * 100 = $430
Max loss = unlimited
Option Position at Expiration
Comments
Needs market direction stability.
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