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

[Guru_Dath]

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??.

[nithin]

@Guru_Dath

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??.

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

Check this

The Long & Short Strangle – Varsity by Zerodha