Learn to trade options: Creating a short straddle strategy

A short straddle is a credit option strategy in which a trader sells a put and call option of the same symbol simultaneously. Both options must also have identical expiration dates and strike prices. A short straddle is typically used by a trader who thinks the security will experience limited short-term volatility, meaning the trader can still potentially profit if the stock price stays stagnant. This strategy also allows you to enter into a position without equity since you will receive an initial credit. However, you must still have enough money to cover the margin requirements. In this video, we'll explain how to construct a short straddle strategy in Questrade IQ, and how to calculate your potential profit and loss using a detailed example. Sign up for a free practice account http://www.questrade.com/platforms/free_trial.aspx Open an account http://www.questrade.com/account/online.aspx Questrade Advantage Sign-up for the Questrade Advantage to trade single- and multi-leg options for only $6.95 + 75 cents per contract. To learn more, see http://www.questrade.com/trading/services/questrade_advantage.aspx Learn more about short straddles http://help.questrade.com/how-to/iq-edge/stock-and-option-quotes/options/option-strategies/short-straddle

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