COVERED PUT	SHORT GUTS
About Strategy	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the Read more..	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..

COVERED PUT Vs SHORT GUTS - Details

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

COVERED PUT Vs SHORT GUTS - When & How to use ?

	COVERED PUT	SHORT GUTS
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	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.
Action	Sell Underlying Sell OTM Put Option	Sell 1 ITM Call, Sell 1 ITM Put
Breakeven Point	Futures Price + Premium Received	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

COVERED PUT Vs SHORT GUTS - Risk & Reward

	COVERED PUT	SHORT GUTS
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	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
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED PUT Vs SHORT GUTS - Strategy Pros & Cons

	COVERED PUT	SHORT GUTS
Similar Strategies	Bear Put Spread, Bear Call Spread	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.
Advantages	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.	• 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.