Sorry of these basic questions. I am trying to understand various strategies. What is the risk involved in a covered short straddle. Here is the trade. On Friday AAPL closed at $76.30. JAN 07 $75 CALL - $15.10 JAN 07 $75 PUT - $10.80 I will buy the stock and sell the stradlle. I can keep the premium and surrender stock and collect $7500 , if the closing price is not $75 on Jan 07. I will make 33% profit. What is the risk involved here.