an option strategy in which an at the money call and an at the money put are sold
This is simply the opposite of a long straddle. Instead of buying an equal number of puts and calls, you would sell an equal quantity of both calls and puts with the same strike and expiration date.
A straddle in which one put and one call are sold.
Selling one put and one call.
Writing an equal number of Puts and Calls with the same strike price and the same expiry date.
The short straddle is a non-directional options trading strategy that involves simultaneously selling a put and a call of the same underlying security, strike price and expiration date. The profit is limited to the premiums of the put and call, but it has substantial risk if the underlying security either drops substantially below the strike price of the put, or soars above the strike price of the call. The break-even point at expiration occurs when the intrinsic value of the put or the call is equal to the sum of the premiums of the put and call.