One of the most popular options strategies. Combines a short put spread and short call spread. You define a range where you expect the stock to stay. Maximum profit if stock stays between the two short strikes at expiration.
Net premium received
Width of wider spread - Net premium received
Short put strike - Premium AND Short call strike + Premium
Short 1 OTM Put + Long 1 further OTM Put + Short 1 OTM Call + Long 1 further OTM Call
Limited profit (net premium). Limited, defined risk. Maximum profit zone is the width between short strikes.
When you expect the stock to trade in a range. When IV is high. One of the most consistently used income strategies. Popular in indices and large-cap stocks.