What Is a Short Strangle?

By Matthew DiLallo – Updated Apr 17, 2025 at 12:08 AM

Key Points

A short strangle involves selling a call and a put option on the same stock with different strike prices.
Maximum profit from a short strangle is the total options premium received.
Risks include unlimited losses with an uncovered strangle and forced stock transactions with a covered one.

A short strangle is an options trading strategy. It involves selling a call option and a put option on the same underlying stock with the same expiration date. A short strangle enables investors to try to profit from a stock's volatility through the options premium income they received in the trade.

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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Matt DiLallo has positions in Apple and has the following options: short May 2025 $275 calls on Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.