LONG GUTS	COVERED COMBINATION
About Strategy	Long Guts Option Strategy  This strategy is implemented by a trader when he is neutral on the movements and bullish on volatility i.e. he expects the stock to move in either direction with high magnitude. This strategy involves buying 1 ITM Call Option and 1 ITM Put Option. This strategy can be called as Debit Spread because trader’s account is debited at the time of entering the positions.< Read more..	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

LONG GUTS Vs COVERED COMBINATION - Details

	LONG GUTS	COVERED COMBINATION
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	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

LONG GUTS Vs COVERED COMBINATION - When & How to use ?

	LONG GUTS	COVERED COMBINATION
Market View	Neutral	Bullish
When to use?	This strategy is implemented by a trader when he is neutral on the movements and bullish on volatility i.e. he expects the stock to move in either direction with high magnitude.	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Buy 1 ITM Call, Buy 1 ITM Put	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

LONG GUTS Vs COVERED COMBINATION - Risk & Reward

	LONG GUTS	COVERED COMBINATION
Maximum Profit Scenario	Price of Underlying - Strike Price of Long Call - Net Premium Paid OR Strike Price of Long Put - Price of Underlying - Premium Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Net Premium Paid + Strike Price of Long Put - Strike Price of Long Call + Commissions Paid	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Unlimited	Limited

LONG GUTS Vs COVERED COMBINATION - Strategy Pros & Cons

	LONG GUTS	COVERED COMBINATION
Similar Strategies	Short Put Ladder, Strip, Strap	Stock Repair Strategy
Disadvantage	• More commission involved than simply buying call or put option. • Expensive.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• Investors can get unlimited profit if the underlying asset goes up or down. • Ability to profit no matter if the market goes in either direction. • Limited loss.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.