 Welcome, in this video I want to teach you how to trade a short strangle. So first the criteria. The market assumption is neutral, so we want price to stay in a specific range between now and expiration. We want the implied volatility to be high, so we sell the options for a higher price. The optimal timeframe is going to be between 30 and 60 days to expiration when we enter the trade, and we're looking for a profit target of between 30 and 50% of max profit. Both the downside and the upside risk on a short strangle are undefined because we're selling naked options, but that also gives us a higher probability of success. In this case it starts at over 70%. With the way that we manage these trades, we're actually going to have a success over 85%, sometimes over 90% of the time, but the initial probability of profit when you set it up this way will be over 70%. So here's the trade setup. First we're going to sell an out-of-the-money call, and we're going to do it in that 15 to 30 delta range, and then we're going to sell an out-of-the-money put in that 15 to 30 delta range. And as a note, time decay or theta positively impacts this position, so each day that you're in the trade you're going to be collecting that daily paycheck, collecting that theta. Let's go to the platform and take a look at an example. So we're looking at a chart of the QQQs, which is the NASDAQ ETF, and you can see that the implied volatility percentile is at 51, IV ranks at 33, but as long as one of these is over 50, that gives us the opportunity to what we call sell higher implied volatility. So this would be a good candidate to sell a short strangle on. So if we go to the trade tab and we look at the different option chains, as you can see, we want to stay out of the weeklies and only trade the monthly cycles. You can see we've got one with 28 days, so that's too short. Remember we want to be between 30 and 60, and then we've got one at 56, so this is the option chain that we would choose. So simply expand the September, in this case, option chain with 56 days to expiration. And we'll take a look at the different deltas. So if we start on the call side and look at the delta over here, remember we want somewhere between 15 and 30 delta. So you could choose any one of these three strikes. Just remember, the further away you are, the higher probability of success, but the less profit potential. The closer to the money, which is indicated by right here with these shaded boxes meet, the closer you are to the money, the more credit you're going to collect, the higher profit potential you have, but the lower probability of success. The further away from the money you get, or the lower the delta, the higher probability of success, but the lower max profit potential. So in this case, I'm just going to choose the 18 delta, so that would be the 150 strike. So simply right click, sell, strangle, and that populates. Now it defaults to the next strike, which is not the one we want. So it defaults to the 149. So we need to go over to the put side and look for a similar strike. So I want to be, I did 18, the 18 delta on the call side, which is right here. So I want to do about the 18 delta on the put side. Now there's not an 18, there's a 17 or a 20. So I'll opt for the one a little bit higher, which would be the 20 delta, which represents the 136 strike. So we've got to go down here to the put, change that to 136, and then we can right click and analyze the trade. So that populates our visual profile of the short strangle, and what we want to do next is we want to set our slices to break even. And so then we would just choose the expiration date, in this case 916. So that matches up with our expiration date here. And we also want to change the date in this calendar up here to match the expiration date, in this case 916. So what that does is it takes these price slices and puts them to the break even point on both sides. As you can see, this has over a 71% probability of profit when we enter the trade. The way that we manage them, as I mentioned before, we actually win on these trades closer to 85, 90, sometimes over 90% of the time. And what you'll see with just one contract, you've got a max profit of $172. Now the risk to each side is undefined, so you want to have a criteria in mind for when to exit the trade if it has a massive move in one direction or another. Typically two times your initial credit received works well as a theoretical stop loss. Now we do not use hard stop losses when trading this type of strategy because it does not create the highest profit potential over time, but you can have kind of an area where you want to get out if it does have a massive move. And that's typically two times the credit. So if the credit right now is $172 or $1.72, you can double that, and once you reach that point either side, then you can simply exit the trade. So that's the setup, and that's what it looks like on the visual representation. And remember, we're going to manage these at between 25% to 50% of max profit. So if you are looking at $172 as your max profit, you'd look to get out of this for somewhere around $80, $80, $90, it would be kind of the profit. So you might think $80 or $90, that's not very much. Well, this is only one contract. So the bigger your account, the more contracts you can do and the better at trading these strategies, you can kick that up. So if you do 10 contracts, now we're looking at $1,720 as the max profit. So I hope that was helpful. If you'd like to learn more about the different strategies that we use to make consistent returns, come see us at navigationtrading.com. We've got a ton of free resources, including the navigation watch list, which is a list of the most profitable symbols to trade for each type of strategy. We've got the volatility indicator, which you've seen on my charts. You can download this directly to your Thinkorswim trading platform. And we've got a free options course called Trading Options for Income, which is a step-by-step guide to get you making consistent trades right away. We look forward to seeing you there.