Covered short straddle
BullishLimited profitLimited loss
Spot + short straddle: heavy income, doubled downside below the strike.
Payoff at expiry — live BTC example
Net debit
$73,862
Max profit
$1,138
Max loss
$148,862
Breakeven
74,431
Example legs (0.4 DTE front)
- Buy spot
- Sell 75,000 call
- Sell 75,000 put
Entry greeks (per 1 BTC notional): Δ 1.002 · Γ -0.4257 per 1% · vega $-19.70/pt · theta $1416.86/day
How it works
Long spot with a short ATM call and put. The call is covered by the spot; the short put doubles exposure below the strike.
When to use it
Aggressive income when you are happy to add to the position lower and expect a quiet market.
Risks & management
Below the strike you lose on spot AND the short put — roughly 2× long. Treat the max-loss number, not the credit, as the position size.
Related structures
Example built from live Delta Exchange BTC marks on the nearest constructible expiry; numbers refresh with the chain. Educational content, not investment advice.