Neutral strategy · Advanced
Market outlook Range-bound with upside risk tolerance
Two short calls and one short put at the same strike collect elevated premium, betting the stock settles near that price with more risk skewed to the upside.
| Price at expiry | Move | Profit / loss |
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Strike configurations
Sell two calls and one put at the same strike.
Key difference: Standard weighting balancing extra premium against upside risk concentration.
Best for: Traders who want short-straddle income with a defensive lean against a rally.
Sell three calls and one put at the same strike for a stronger defensive skew.
Key difference: Collects more premium but concentrates even more risk on the upside.
Best for: Traders with strong conviction the stock will not rally, willing to accept larger asymmetric upside risk.
Common questions
The extra short call increases the premium collected and expresses a view that a rally is less likely than a decline, at the cost of a larger loss if the stock does break out to the upside.
Yes, particularly to the upside — the extra short call means losses on a rally compound faster than they would on a standard short straddle of the same size.
Experienced premium sellers with a specific view that upside risk is limited, comfortable managing undefined, asymmetric risk that a beginner-friendly defined-risk spread would avoid.
A short strip would instead sell two puts and one call, skewing the defensive lean toward the downside instead — the naming follows the same convention as the long strip and strap strategies.
Deep dive
Detailed explanations, management techniques, and real-world scenarios
Quick reference
Quick answers about when to use, capital needed, and key risks
This calculator uses intrinsic value at expiration and entered premiums. It excludes implied volatility, Greeks, time decay before expiration, fees, tax, dividends, liquidity, margin, assignment and exercise behavior. Educational illustration only—not financial advice.