Covered short strangle

BullishLimited profitLimited loss

Spot + short strangle: income with doubled risk below the put.

Payoff at expiry — live BTC example

Net debit

$75,951

Max profit

$2,249

Max loss

$151,351

Breakeven

75,951

Example legs (1.0 DTE front)

Buy spot
Sell 78,200 call
Sell 75,400 put

Entry greeks (per 1 BTC notional): Δ 0.950 · Γ -0.2164 per 1% · vega $-26.63/pt · theta $818.44/day

How it works

Long spot plus short OTM call and put: premium from both sides, spot covers the call, the put adds lower-entry obligation.

When to use it

Same as the covered straddle but with a buffer: more room to be wrong, less premium.

Risks & management

Doubled downside below the put strike. Manage the put side early on a break lower rather than hoping for the level.

Open in payoff builder →

Related structures

Covered call
Protective put
Collar
Covered short straddle

Example built from live Delta Exchange BTC marks on the nearest constructible expiry; numbers refresh with the chain. Educational content, not investment advice.