Short Strangles: Options Management Strategy

In episode #5 of tastylive’s Option Crash Course: Strategy Management, we begin to explore undefined-risk strategies with …

34 thoughts on “Short Strangles: Options Management Strategy”

  1. Great video. What is the typical width for short strangles? I am currently shorting $140 calls and $100 puts (ABNB) with DTE on 12/22/2022. Do you recommend move down my short call side to narrow the width a bit for the benefit of some credit while I wait for it to expire.

  2. To limit risk further, I would consider only doing strangles on index ETF's like SPY, DIA, QQQ and IWM. and also by buying some long options way out of the money for pennies.

  3. What if one side getting tested but price still in between strikes and the untested side is very low delta at +/-0.02? At this point it is not doing much in terms of profits on this side. Would you roll the untested or still wait for price to become itm? Starting delta 0.1 for each side. Thanks!!!!

  4. Great video! Learning a lot watching your videos? Can you please a make a video as to how to defend inverted strangle?

  5. To Mr. Jim – please note I do not comment often on YT. This is probably my third comment in my live. I have watched tones of videos about options. I have studied it for several months: books, paper trading, videos etc. I believe I had quite a lot of knowledge now. I still cannot start live trading, perhaps I do not have balls for it. I am afraid that once I enter the live strangles I will become a trader and I do not want to follow index, stocks prices all day; nevertheless, Mr. Jim you are magician. I can watch your videos all day all night; I love the way you are talking and sharing the practical approach just for free with such an enthusiasms. I wish you the best trades, stay healthy and high five to all tastytrade members!

  6. Dr. Jim, help me understand, riddle me this, If i own 100 shares of the stock and have cash on hand, is the strangle or straddle really undefined risk? I look at it like as trying to run the wheel strategy by selling a covered call (since I own the stock) and selling a cash secured put (since I have the cash) at the same time. Am I missing something?

  7. This is bad. Rolling your positions ad nauseum is guaranteed to lose you a lot of money. This is why I only sell strangles on stock I wouldn't mind owning. I never roll. If I get assigned, that's cool. If price goes up and approaches the call strike, I just buy the stock and cover myself. If it gets called, great. If it goes back down whatever, I'll just sell another call at expiration.

  8. Been trading Strangles for a while. Messed up the first coupe of tested sides, but have learned to manage better using Step 1. I like the other steps and will put them in play. Thanks for the reminder on checking the IVR with trades that are floating. Great video.

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