What do you mean my selling a 10% OTM strangle?


#1

i came across this sentence in a blog. i understand strangle and OTM, but what is 10% OTM?. Say if NIFTY is @ 10800, +/-10% of 10800? meaning sell 11880CE/9720PE??.


#2

yep a 10% OTM short strangle would mean shorting strikes 10% above and below the current price - calls and puts respectively.

Check this