Optimum price to short straddle?

Discussion in 'Options' started by a529612, May 11, 2006.

  1. I noticed you get more premium if the stock is away from ATM either side. Is it best not to initiate the position when the stock is near ATM?
  2. Please take this as friendly advice: You need to read *much* more before you consider selling straddles. You should be intuitively familiar with delta, gamma, and theta, and have a plan for trade adjustments before you get in.

    If you want to start with some short premium, take a look at Iron Condors first. Your mistakes won't break the bank. :)

    Condor = Limited Risk Strangle
    Butterfly = Limited Risk Straddle
  3. I was praying this thread would go unanswered... but in the spirit of cooperation -- you get paid for taking exposure[deltas], simple as that.
  4. I was really just trying to prevent the inevitable, "How long will $3000 in options last?" threads that would result after the poster's first straddle sale. :)