A Short Strangle is where you are short one put option with a lower strike price for every one short call option at a higher strike price. Both options have the same expiration date.
The Max Loss is uncapped as the market moves in either direction.
The Max Gain is limited to the total premium received for the call and put options.
When to use: When you are bearish on volatility and think market prices will remain stable.
A short strangle is similar to the Short Straddle except the strike prices are further apart, which lowers the premium received but also increases the chance of a profitable trade.