So I've never heard of this before in any literature and am curious about how it might work.
So, selling uncovered calls and puts have unlimited potential for losses as most of us already know. And traditional straddles cancel each other's losses out. Traditionally people would just buy a call for what I wanting, that would minimize risk of loss but would also leave potential profits on the table in a downswing. Uncovered Calls and Puts are usually cheaper than covered calls and puts because there's more risk.
But what if you sold both an uncovered call and put at the same strike price for an 'uncovered straddle.' Wouldn't then the unlimited losses cancel out? Or would this still have unlimited loss potential because profits are limited on the call and put?
Submitted August 16, 2022 at 01:41AM by Gundam_net https://ift.tt/lLmkaJN
