← Back to Playbook
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 | 84% | +$659.00 | 6.3 | 31 | 30 |
| HD | 89% | +$211.00 | 6.9 | 31 | 30 |
| SYK | 83% | +$180.00 | 1.9 | 30 | 30 |
| CRM | 89% | +$141.00 | 8.7 | 30 | 30 |
| ABNB | 89% | +$132.00 | 6.4 | 31 | 30 |
| SMH | 88% | +$121.00 | 1.5 | 42 | 21 |
| LOW | 89% | +$115.00 | 6.8 | 31 | 30 |
| CASY | 81% | +$112.00 | 0.9 | 43 | 21 |
| COIN | 81% | +$104.00 | 0.9 | 43 | 21 |
| SHOP | 81% | +$95.00 | 2.1 | 43 | 21 |
| FDX | 84% | +$83.00 | 1.3 | 31 | 30 |
| GD | 85% | +$82.00 | 2.0 | 43 | 21 |
| XBI | 83% | +$75.00 | 2.1 | 30 | 30 |
| MRK | 83% | +$73.00 | 2.2 | 30 | 30 |
Backtested results are not a guarantee of future performance.