RATIO CALL SPREAD	LONG GUTS
About Strategy	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..	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..

RATIO CALL SPREAD Vs LONG GUTS - Details

	RATIO CALL SPREAD	LONG GUTS
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	3	2
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	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	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

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

	RATIO CALL SPREAD	LONG GUTS
Market View	Neutral	Neutral
When to use?	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.	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	Buy 1 ITM Call, Sell 2 OTM Calls	Buy 1 ITM Call, Buy 1 ITM Put
Breakeven Point	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	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

RATIO CALL SPREAD Vs LONG GUTS - Risk & Reward

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

RATIO CALL SPREAD Vs LONG GUTS - Strategy Pros & Cons

	RATIO CALL SPREAD	LONG GUTS
Similar Strategies	Variable Ratio Write	Short Put Ladder, Strip, Strap
Disadvantage	• Unlimited potential loss. • Complex strategy with limited profit.	• More commission involved than simply buying call or put option. • Expensive.
Advantages	• 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.	• 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.