FxWirePro: $/¥ moving in tight range (124.50-122.158) - naked straddle shorting for speculators

As we had anticipated earlier that the trend for this pair is going to be in tight range between 124.467 - 122.158 from last fortnight or so, look what's been happening on this pair which we've perceived this as non directional but slightly downward bias since some bearish signals (shooting star at peak on daily chart) for short term basis are popping up.

Since USD/JPY's non directional pattern is persisting but some bearish candles are indicating slight bearishness, candles such as shooting star occurred at 124.126 and RSI signals a slight divergence with rising prices which means trend reversal to happen in near future, while on stochastic curve %D line crossover occurred near 80 levels.

Option Trade Recommendation: Naked Straddle Shorting

Why straddle shorting at this juncture: As we foresee non-directional trend along with lower implied volatility of ATM contracts at 7.58% are puzzling this pair on weekly charts we like to remain in safe zone and recommend shorting a straddle using At-The-Money options, so thereby, as prices are unlikely to behave in any dramatic ways on either side, one can benefit from certain returns by shorting both calls and puts.

Short ATM put and ATM call (strikes at 124.050) simultaneously of the same expiry (preferably short term for maturity is desired). Maximum returns for the short straddle is achieved when the USD/JPY price on expiry is trading at around 123 levels only as both the instruments have to wipe off worthless. So that the options writer gets to keep the entire initial credit taken as profit.