SHORT GUTS	RISK REVERSAL
About Strategy	Short Guts Option Strategy  This strategy is implemented by a trader when he is neutral on the movements and bearish on volatility i.e. he expects the stock to be range bound in the near future. This strategy involves sale of 1 ITM Call Option and 1 ITM Put Option. This strategy can be called as Credit Spread since his account is credited at the time of entering in the positions. < Read more..	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod .. Read more..

SHORT GUTS Vs RISK REVERSAL - Details

	SHORT GUTS	RISK REVERSAL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Premium received - Put Strike Price

SHORT GUTS Vs RISK REVERSAL - When & How to use ?

	SHORT GUTS	RISK REVERSAL
Market View	Neutral	Bullish
When to use?	This strategy is implemented by a trader when he is neutral on the movements and bearish on volatility i.e. he expects the stock to be range bound in the near future.	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Sell 1 ITM Call, Sell 1 ITM Put	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.
Breakeven Point	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Premium received - Put Strike Price

SHORT GUTS Vs RISK REVERSAL - Risk & Reward

	SHORT GUTS	RISK REVERSAL
Maximum Profit Scenario	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid	You have unlimited profit potential to the upside.
Maximum Loss Scenario	Price of Underlying - Strike Price of Short Call - Net Premium Received OR Strike Price of Short Put - Price of Underlying - Net Premium Received + Commissions Paid	You have nearly unlimited downside risk as well because you are short the put
Risk	Unlimited	Unlimited
Reward	Limited	Unlimited

SHORT GUTS Vs RISK REVERSAL - Strategy Pros & Cons

	SHORT GUTS	RISK REVERSAL
Similar Strategies	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)	-
Disadvantage	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.	Unlimited Risk.
Advantages	• Ability to profit even when underlying asset stays stagnant. • You are already paid your full profit the moment the position is put on as this is a credit spread position. • Higher chance of ending in full profit as compared to short strangle or short straddle.	Unlimited profit.