Short Strangle vs Short Straddle
Considering both the strategies which one is better and pros and cons of both ? Positional trades trade in weekly options and monthly stock options
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Straddle is more high risk high reward strategy compared to strangle. I usually prefer straddle for next month or far month options. Mainly because premiums are higher and lot easier to manage than weekly or monthly straddles. However, on the downside decay will be slightly slower.
Strangle or ICs for monthly/weekly - I prefer 80% POP on monthly strangles. Provides wide range and good time to adjust if things go south.
Weekly ICs provide good return per week mainly because of the cheaper protection(bought options) 80% POP ICs on nifty gives close to 2% . However, ICs are very sensitive to volatility and you might have to take it to expiry to get maximum returns, this kind of increases the risk.
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Both Strategies have their own time to implement. People say India VIX is one factor . So you can keep that in mind. Currently India VIx at its lowest in past few months.
Straddle or Strangle might be very cheap now. So better go with some other strategy.
Or
One adjustment to the Strangle you can do.
Ratio Spread. That’s definitely gonna help when India Vix arises.
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