A short straddle is an options position in which a trader sells a call option and a put option on the same underlying asset, with the same strike price and expiry. It is the opposite side of a long straddle. The seller collects both premiums at the outset and keeps them in full only if the underlying price finishes exactly at the strike. The position gains from the passing of time and from a fall in implied volatility.
The maximum profit is the total premium received. The break-even points are the strike plus and minus that total. With a strike of $100 and premiums of $4 for the call and $3.50 for the put, the seller receives $7.50 and breaks even at $92.50 and $107.50. Beyond those levels losses grow without limit on the upside and down to a price of zero on the downside. The position is a form of selling volatility and requires substantial margin.