SHORT STRANGLE	LONG GUTS
About Strategy	Short Strangle Option Strategy  This strategy is similar to Short Straddle; the only difference is of the strike prices at which the positions are built. Short Strangle involves selling of one OTM Call Option and selling of one OTM Put Option, of the same expiry date and same underlying asset. Here the probability of making profits is more as there is a spread between the two strike prices, and if Read more..	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..

SHORT STRANGLE Vs LONG GUTS - Details

	SHORT STRANGLE	LONG GUTS
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

SHORT STRANGLE Vs LONG GUTS - When & How to use ?

	SHORT STRANGLE	LONG GUTS
Market View	Neutral	Neutral
When to use?	This strategy is perfect in a neutral market scenario when the underlying is expected to be less volatile.	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.
Action	Sell OTM Call, Sell OTM Put	Buy 1 ITM Call, Buy 1 ITM Put
Breakeven Point	Lower Break-even = Strike Price of Put - Net Premium, Upper Break-even = Strike Price of Call+ Net Premium	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

SHORT STRANGLE Vs LONG GUTS - Risk & Reward

	SHORT STRANGLE	LONG GUTS
Maximum Profit Scenario	Maximum Profit = Net Premium Received	Price of Underlying - Strike Price of Long Call - Net Premium Paid OR Strike Price of Long Put - Price of Underlying - Premium Paid
Maximum Loss Scenario	Loss = Price of Underlying - Strike Price of Short Call - Net Premium Received	Net Premium Paid + Strike Price of Long Put - Strike Price of Long Call + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

SHORT STRANGLE Vs LONG GUTS - Strategy Pros & Cons

	SHORT STRANGLE	LONG GUTS
Similar Strategies	Short Straddle, Long Strangle	Short Put Ladder, Strip, Strap
Disadvantage	• Unlimited loss is associated with this strategy, not recommended for beginners. • Limited reward amount.	• More commission involved than simply buying call or put option. • Expensive.
Advantages	• Higher chance of profitability due to selling of OTM options. • Advantage from double time decay and a contraction in volatility. • Traders can book profit when underlying asset stays within a tight trading range.	• 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.