RISK REVERSAL	SHORT GUTS
About Strategy	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod 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..

RISK REVERSAL Vs SHORT GUTS - Details

	RISK REVERSAL	SHORT GUTS
Market View	Bullish	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	Unlimited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Premium received - Put Strike Price	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

RISK REVERSAL Vs SHORT GUTS - When & How to use ?

	RISK REVERSAL	SHORT GUTS
Market View	Bullish	Neutral
When to use?	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.	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	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.	Sell 1 ITM Call, Sell 1 ITM Put
Breakeven Point	Premium received - Put Strike Price	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

RISK REVERSAL Vs SHORT GUTS - Risk & Reward

	RISK REVERSAL	SHORT GUTS
Maximum Profit Scenario	You have unlimited profit potential to the upside.	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid
Maximum Loss Scenario	You have nearly unlimited downside risk as well because you are short the put	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	Unlimited	Limited

RISK REVERSAL Vs SHORT GUTS - Strategy Pros & Cons

	RISK REVERSAL	SHORT GUTS
Similar Strategies	-	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage	Unlimited Risk.	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.
Advantages	Unlimited profit.	• 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.