What is the max profit of a covered short straddle?

Limited: there is a ceiling on what it can make. The calculator gives the figure for your strikes and expiration.

What is the max loss of a covered short straddle?

Nearly unlimited: a large move against it can lose many times what it takes in. The calculator gives the figure for your strikes and expiration.

How do I calculate a covered short straddle's profit and loss?

Open the covered short straddle in the strategy calculator. It places the legs on a real expiration, and you can drag the strikes, change the date, and read profit and loss by price and date, with max profit, max loss, and the breakevens.

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Covered short straddle calculator

Own stock and sell both the ATM call and put. Extra income, still long the shares.

Open in the calculator All strategies

OutlookIncome

Max profitLimited

Max lossNearly unlimited

LevelAdvanced

What is a covered short straddle?

A covered short straddle is a covered call plus a short put. You collect two credits. The call still caps upside; the short put adds downside obligation on top of the shares.

Legs

Own the underlying
Sell a call at A
Sell a put at A

Payoff at expiration, sketched. The live example below has the real prices.

Live example on SPY

Net credit$3,574.00

ROIC2.36%

Max loss$147,577.50

Max profit$3,620.50

Chance of profitLocked: ProUpgrade

BreakevenAbove $737.90 (−2.3%)At expiration

Est. margin$73,946.00

756C−112/18 · $19.20
756P−112/18 · $16.54
Long 100 shares at $755.53

SPY · Oct 30, 2026, 3:59 PM ET

With SPY at 755.53, on the Dec 18 expiration (49 days out): own 100 shares at $755.53, sell 1 756 call, and sell 1 756 put. Net credit $3,574. Max profit $3,620.50; max loss $147,577.50. Breakeven at expiration: Above $737.90 (−2.3%).

Open this covered short straddle in the calculator to move the strikes, change the date and implied volatility, and read profit and loss by price and date.

Questions

What is a covered short straddle?: A covered short straddle is a covered call plus a short put. You collect two credits. The call still caps upside; the short put adds downside obligation on top of the shares.
When does a covered short straddle make money?: Own stock and sell both the ATM call and put. Extra income, still long the shares.
What is the max profit of a covered short straddle?: Limited: there is a ceiling on what it can make. The calculator gives the figure for your strikes and expiration.
What is the max loss of a covered short straddle?: Nearly unlimited: a large move against it can lose many times what it takes in. The calculator gives the figure for your strikes and expiration.
How do I calculate a covered short straddle's profit and loss?: Open the covered short straddle in the strategy calculator. It places the legs on a real expiration, and you can drag the strikes, change the date, and read profit and loss by price and date, with max profit, max loss, and the breakevens.