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A Short Strangle is an options strategy best suited for traders with a neutral market outlook and moderate to high volatility expectations. The strategy involves selling an out-of-the-money (OTM) call option above the current market level and an OTM put option below it, allowing the trader to collect premiums from both sides. It is ideal when the market is expected to remain range-bound, especially during periods of high implied volatility, as expensive premiums enhance potential profits. The strategy also benefits from time decay, which gradually erodes the value of the sold options. In the current market context, with GIFT Nifty showing a decline and the India VIX rising, a Short Strangle could be effective if the market stabilizes after the initial drop and volatility starts to decline. The strategy works best when the index remains between the chosen strike prices. For example, selling a 25,200 call and a 24,700 put could yield profits if the Nifty trades within this range. However, traders must be aware of the risks: while the maximum profit is limited to the premiums collected, potential losses are unlimited if the market moves sharply in either direction. Breakeven points are calculated by adding and subtracting the net premium from the strike prices. It’s essential to manage risk with stop-loss orders and appropriate position sizing, given the strategy’s exposure to significant market movements.