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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 |
|---|---|---|---|---|---|
| HYG | 94% | +$8 | 8.1 | 57 | 21 |
| PEP | 91% | +$117 | 5.0 | 40 | 30 |
| PGY | 91% | +$108 | 1.4 | 40 | 30 |
| MDLZ | 91% | +$15 | 2.1 | 57 | 21 |
| GEV | 89% | +$609 | 5.1 | 49 | 10 |
| RBRK | 88% | +$242 | 3.8 | 44 | 11 |
| OXY | 88% | +$51 | 2.9 | 57 | 21 |
| DLR | 88% | +$128 | 2.5 | 57 | 21 |
| ASML | 88% | +$426 | 2.0 | 57 | 21 |
| MMM | 88% | +$71 | 1.7 | 57 | 21 |
| KMI | 88% | +$8 | 1.8 | 57 | 21 |
| AMAT | 88% | +$166 | 1.3 | 57 | 21 |
| KLAC | 88% | +$1278 | 1.6 | 57 | 21 |
| XLP | 88% | +$26 | 1.4 | 57 | 21 |
| TLT | 87% | +$26 | 3.5 | 41 | 30 |
| LNG | 87% | +$114 | 3.1 | 41 | 30 |
| XRT | 87% | +$45 | 2.4 | 41 | 30 |
| LQD | 87% | +$18 | 2.1 | 41 | 30 |
| SPG | 87% | +$113 | 2.1 | 41 | 30 |
| CTRE | 87% | +$18 | 2.6 | 41 | 30 |
| VRTX | 87% | +$295 | 2.6 | 41 | 30 |
| ADP | 87% | +$155 | 1.8 | 41 | 30 |
| IBB | 87% | +$162 | 3.8 | 40 | 30 |
| ABNB | 87% | +$230 | 2.4 | 40 | 30 |
| BHP | 87% | +$35 | 2.8 | 40 | 45 |
| V | 86% | +$233 | 2.2 | 57 | 21 |
| COP | 86% | +$133 | 2.7 | 57 | 21 |
| PL | 86% | +$10 | 2.0 | 57 | 21 |
| ORCL | 86% | +$110 | 1.4 | 57 | 21 |
| ON | 86% | +$57 | 0.6 | 57 | 21 |
| XLC | 86% | +$22 | 0.7 | 57 | 21 |
| BMY | 86% | +$13 | 0.6 | 57 | 21 |
| LOW | 84% | +$302 | 3.3 | 41 | 30 |
| MCD | 84% | +$278 | 2.8 | 41 | 30 |
| SBUX | 84% | +$109 | 2.9 | 41 | 30 |
| SYK | 84% | +$354 | 2.5 | 41 | 30 |
| XOP | 84% | +$162 | 2.2 | 41 | 30 |
| HAL | 84% | +$34 | 1.6 | 41 | 30 |
| XLE | 84% | +$13 | 1.8 | 41 | 30 |
| EOG | 84% | +$43 | 1.3 | 41 | 30 |
| TSM | 84% | +$200 | 1.4 | 41 | 30 |
| LLY | 84% | +$328 | 2.6 | 41 | 30 |
| MAR | 84% | +$153 | 0.9 | 41 | 30 |
| HD | 84% | +$155 | 1.1 | 41 | 30 |
| LIN | 84% | +$82 | 0.7 | 41 | 30 |
| CVX | 84% | +$70 | 1.0 | 41 | 30 |
| META | 84% | +$68 | 0.2 | 59 | 30 |
| NBIS | 84% | +$343 | 4.5 | 31 | 12 |
| XBI | 83% | +$146 | 2.8 | 40 | 30 |
| HGV | 83% | +$82 | 2.6 | 40 | 30 |
Backtested results are not a guarantee of future performance.