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Short Strangle
neutral Uncapped riskMaximum premium for a range-bound view.
When to use it
High IV rank, range-bound ticker, and a margin account. Sell an OTM put and an OTM call. Undefined-risk cousin of the condor.
Max profit
Both premiums collected.
Max loss
Large if the stock makes a big move; manage actively.
Payoff at expiry
illustrative shape — not to scale
■ profit zone
■ loss zone
X axis = stock price at expiry →
How it's built
Strikes shown low→high. Sell = collect premium · Buy = pay premium for protection or upside.
Hermes-evaluated setups
High-conviction per-ticker applications — setups with a confidence-adjusted win rate ≥ 80% over ≥20 backtested trades (95% lower bound — honest for the sample size, never a raw 100%). Avg P/L is the mean profit/loss per one-contract position.
| Ticker | Win Rate | Avg P/L / contract | Sharpe | Trades | DTE |
|---|---|---|---|---|---|
| EQIX | 88% | +$251.00 | 1.8 | 43 | 21 |
| MSCI | 92% | +$248.00 | 7.5 | 43 | 21 |
| TMO | 92% | +$232.00 | 8.4 | 43 | 21 |
| MSFT | 88% | +$229.00 | 2.4 | 43 | 21 |
| APP | 84% | +$187.00 | 1.7 | 31 | 30 |
| TXN | 81% | +$168.00 | 2.0 | 43 | 21 |
| AMD | 84% | +$165.00 | 3.4 | 31 | 30 |
| MA | 81% | +$162.00 | 1.3 | 43 | 21 |
| HD | 89% | +$153.00 | 8.8 | 31 | 30 |
| NOW | 84% | +$151.00 | 2.1 | 31 | 30 |
| LIN | 83% | +$134.00 | 1.1 | 30 | 30 |
| LNG | 84% | +$126.00 | 2.9 | 31 | 30 |
| ETN | 81% | +$118.00 | 1.2 | 43 | 21 |
| KKR | 84% | +$106.00 | 2.1 | 31 | 30 |
| XOP | 89% | +$97.00 | 5.0 | 31 | 30 |
| AAPL | 84% | +$94.00 | 1.4 | 31 | 30 |
| QCOM | 85% | +$91.00 | 1.8 | 43 | 21 |
| SMH | 85% | +$91.00 | 1.4 | 43 | 21 |
| AMAT | 88% | +$89.00 | 3.6 | 43 | 21 |
| BA | 88% | +$89.00 | 2.1 | 43 | 21 |
Backtested results are not a guarantee of future performance.