Covered short strangle
BullishLimited profitLimited loss
Spot + short strangle: income with doubled risk below the put.
Payoff at expiry — live BTC example
Net debit
$65,824
Max profit
$1,176
Max loss
$130,624
Breakeven
65,824
Example legs (0.7 DTE front)
- Buy spot
- Sell 67,000 call
- Sell 64,800 put
Entry greeks (per 1 BTC notional): Δ 1.001 · Γ -0.2591 per 1% · vega $-9.27/pt · theta $184.83/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.
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.