Straddle with Hedges

### What is a Straddle with Hedges? This is essentially how a lot of professional and institutional desks actually trade a short straddle — nobody serious runs a naked straddle without some form of tail-risk protection. You keep the ATM short call and short put for maximum premium, but add far OTM long options (or use offsetting stock/futures positions) to cap the disaster scenario. Structurally, once you add the wings, this starts to resemble an Iron Butterfly — the difference is often in how far out the hedges sit and how actively the position is managed versus set-and-forget.