SHORT GUTS	RATIO CALL SPREAD
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..	Ratio Call Spread Option Strategy  As the name suggests, a ratio of 2:1 is followed i.e. buy 1 ITM Call and simultaneously sell OTM Calls double the number of ITM Calls (In this case 2). This strategy is used by trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited since he is .. Read more..

SHORT GUTS Vs RATIO CALL SPREAD - Details

	SHORT GUTS	RATIO CALL SPREAD
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	3
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Limited
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	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received

SHORT GUTS Vs RATIO CALL SPREAD - When & How to use ?

	SHORT GUTS	RATIO CALL SPREAD
Market View	Neutral	Neutral
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 is used by trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited since he is selling two calls.
Action	Sell 1 ITM Call, Sell 1 ITM Put	Buy 1 ITM Call, Sell 2 OTM Calls
Breakeven Point	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received

SHORT GUTS Vs RATIO CALL SPREAD - Risk & Reward

	SHORT GUTS	RATIO CALL SPREAD
Maximum Profit Scenario	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid
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	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid
Risk	Unlimited	Unlimited
Reward	Limited	Limited

SHORT GUTS Vs RATIO CALL SPREAD - Strategy Pros & Cons

	SHORT GUTS	RATIO CALL SPREAD
Similar Strategies	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)	Variable Ratio Write
Disadvantage	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.	• Unlimited potential loss. • Complex strategy with limited profit.
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.	• Downside risk is almost zero. • Investors can book profit from share prices moving within given limits. • Trader can maximise profit when the share closes at the upper breakeven point.