Short Straddle is the combination of short one call option and short one put option at the same strike price. Here is maximum Loss at unlimited as the market moves in either direction. whereas maximum Gain is set to limited to the net premium received for selling the options. This strategy can be used when investors 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.