To The Moon

In stocks, it’s usually “up or down.” But when prices stall, both bulls and bears hit “dead time.”

Big moves aren’t the norm. In choppy markets, you can use time as a weapon with neutral plays like straddles or strangles.

📘 In The Options Handbook, straddle and strangle strategies are explained like this:

▶ Short Straddle – Higher Income, Tighter Range 🤔

• When to Use: You expect very low volatility

• Structure: Sell a call and a put at the same strike price on the same expiration date

• P/L Example:

1. Sell a $100 call for $5 premium. Sell a $100 put for $5 premium. Both expire the same date.

2. If price stays between $95–$105, you keep some or all of the premium.

3. If it lands exactly at $100, both options expire worthless, you keep the full $1,000.

4. But if the stock drops below $90 (100–5–5) or rises above $110 (100+5+5), losses begin. And if it keeps moving, those losses grow fast, especially on the upside, where risk is technically unlimited.

▶ Short Strangle – More Breathing Room, Less Premium 🤔

• When to Use: You expect moderate, controlled moves

• Structure: Sell a call and a put at different strike prices on the same expiration date

• P/L Example:

1. Sell a $105 call for $3 premium. Sell a $95 put for $3 premium. Both expire on the same date.

2. If price stays within $95–$105, both options expire worthless, and you pocket the entire premium.

3. If price rises above $111 (105+3+3) or falls below $89 (95–3–3), premiums can’t cover losses. The further it strays from your strikes, the greater your losses.

▶ Summary 🎯

Both are about collecting time value. You're selling options that lose value as time passes. You’re anticipating that the stock price will remain relatively stable until the options expire.

💡 The Options Handbook also includes P/L charts for both strategies—clear at a glance. Now available in the Tiger Coin Center! 🐯

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>> Click here for the Simplified Chinese version <<