Short strangle calculator
Where both breakevens sit, what the trade ties up, and what that is worth annualized.
Dollars per share
Below the price
Above the price
Per share, as quoted
Per share, as quoted
Calendar days
Credit
$210
both legs, one contract
Buying power
$1,210
estimated, Reg T
Return
17.36%
on buying power, over 45 days
Lower breakeven
$87.90
12.1% below the price
Upper breakeven
$112.10
12.1% above the price
Annualized
140.8%
simple, not compounded
How each figure is worked out
- Credit is the put credit plus the call credit, × 100. One contract of each leg covers 100 shares.
- Buying power is an estimate of what a margin account sets aside, using the standard naked-option rule brokers apply. For each leg it is the greatest of 20% of the stock price less the amount the strike is out of the money, 10% of the strike (put) or of the stock price (call), or $2.50 — each plus that leg’s credit. A strangle is charged the larger leg plus the other leg’s credit, because both legs cannot finish in the money.
- Breakevens are the put strike less the total credit and the call strike plus it, per share. The whole credit protects each side, because only one side can be tested at expiration.
- Return is the credit ÷ buying power, over the holding period.
- Annualized multiplies that by 365 ÷ days. Simple, not compounded, which is the convention an options desk quotes.
Short strangle screener
A calculator prices one strangle you have already found. A screener finds them: it filters a universe for names liquid enough to trade two legs at a fair spread, where implied volatility is high against its own history and no earnings date falls inside the trade, then ranks what is left. PutWatch does that with eleven hard gates and six scored factors, and every gate, weight and curve is on the methodology page.
What it leaves out
The buying power is an estimate, not your broker’s figure: portfolio margin charges less, and some brokers charge more. Commissions, fees and early assignment are excluded, and the credits are what you type rather than prices you would be filled at. A short strangle’s loss has no limit above the call strike — the breakevens are where losses begin, not where they stop.
Other calculators
Cash-secured put — Premium, capital required, breakeven and annualized return on one put.
Assignment probability — The chance a short put or call finishes in the money, beside its delta.
PutWatch runs this arithmetic on several hundred names every weekday and publishes a top ten from them — the daily screen.
Research and education, not investment advice. Selling options can lose more than the premium received. See the disclaimer.