A short straddle is where you sell both a calls and puts at the same strike price in the same expiration month.
The Max Loss is uncapped as the market moves in either direction.
The Max Gain is limited to the total premium received when selling the spread.
When to use: When you are bearish on volatility and think market prices will remain stable.
Short straddles are a great way to take advantage of time decay and also if you think the market price will trade sideways over the life of the option.