How Do Options Traders Use a Short Strangle Strategy to Profit from High Implied Volatility?

A short strangle is an options trading strategy where a trader simultaneously sells an out-of-the-money (OTM) call option and an OTM put option with the same expiration date. This strategy is used when the trader expects the implied volatility to be high (meaning high premiums received) but anticipates that the underlying asset's price will remain relatively stable and not breach either OTM strike price before expiration.

The trader profits by collecting the premiums from both options, which decay as the expiration date approaches.