Expand model tag support: add GLM-5.1, simplify Anthropic IDs, scan tags anywhere in message
- Flink update_bars debouncing - update_bars subscription idempotency bugfix - Price decimal correction bugfix of previous commit - Add GLM-5.1 model tag alongside renamed GLM-5 - Use short Anthropic model IDs (sonnet/haiku/opus) instead of full version strings - Allow @tags anywhere in message content, not just at start - Return hasOtherContent flag instead of trimmed rest string - Only trigger greeting stream when tag has no other content - Update workspace knowledge base references to platform/workspace and platform/shapes - Hierarchical knowledge base catalog - 151 Trading Strategies knowledge base articles - Shapes knowledge base article - MutateShapes tool instead of workspace patch
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description: "A bullish income strategy augmenting a covered call by also writing an ATM put at the same strike K, increasing income at the cost of additional downside exposure."
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tags: [options, income, bullish, covered, straddle]
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---
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# Covered Short Straddle
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**Section**: 2.32 | **Asset Class**: Options | **Type**: Income
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## Overview
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The covered short straddle amounts to augmenting a covered call by writing a put option with the same strike K and TTM as the sold call option, thereby increasing the income. The trader's outlook is bullish. This is a combination of: long stock + short call at K + short put at K.
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## Construction
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- Buy 1 share of stock at S0
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- Sell 1 call option at strike K, receiving credit
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- Sell 1 put option at strike K (same strike and expiry), receiving additional credit
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Net credit: C (total premium from both short options)
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## Payoff Profile
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f_T = S_T - S0 - (S_T - K)+ - (K - S_T)+ + C
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- Breakeven: S* = (1/2)(S0 + K - C)
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- Max profit: P_max = K - S0 + C (if S_T = K at expiry)
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- Max loss: L_max = S0 + K - C (if stock goes to zero; put assignment + stock loss)
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## Key Conditions / Signals
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- Bullish to neutral; expects stock to remain near or above K
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- High implied volatility; writing both options collects more premium
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- The additional short put increases income but also increases downside risk significantly
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## Notes
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The downside risk is substantially higher than a plain covered call because the short put adds to the loss if the stock falls below K. The maximum loss occurs if the stock goes to zero (stock loss + put assignment at K).
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