What Is a ‘Short Straddle’ and What Is the Associated Risk?

A Short Straddle involves simultaneously selling (writing) a Call and a Put with the same strike price and expiration date. This strategy profits if the underlying cryptocurrency's price remains stable and close to the strike price, allowing both options to expire worthless.

The associated risk is potentially unlimited loss. If the price moves sharply up, the short Call faces unlimited loss; if it moves sharply down, the short Put faces significant loss down to zero.

It is a high-risk strategy betting on low volatility.