SHORT GUTS	COVERED CALL
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..	Covered Call Option Strategy Mr. X owns Reliance Shares and expects the price to rise in the near future. Mr. X is entitled to receive dividends for the shares he hold in cash market. Covered Call Strategy involves selling of OTM Call Option of the same underlying asset. The OTM Call Option Strike Price will generally be the price, where Mr. X will look to get out o .. Read more..

SHORT GUTS Vs COVERED CALL - Details

	SHORT GUTS	COVERED CALL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
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	Purchase Price of Underlying- Premium Received

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

	SHORT GUTS	COVERED CALL
Market View	Neutral	Bullish
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.	An investor has a short term neutral view on the asset and for this reason holds the asset long and has a short position to generate income.
Action	Sell 1 ITM Call, Sell 1 ITM Put	(Buy Underlying) (Sell OTM Call Option)
Breakeven Point	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Purchase Price of Underlying- Premium Received

SHORT GUTS Vs COVERED CALL - Risk & Reward

	SHORT GUTS	COVERED CALL
Maximum Profit Scenario	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid	[Call Strike Price - Stock Price Paid] + Premium Received
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	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

SHORT GUTS Vs COVERED CALL - Strategy Pros & Cons

	SHORT GUTS	COVERED CALL
Similar Strategies	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)	Bull Call Spread
Disadvantage	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
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.	• Profit from option premium, rise in the underlying stock and dividends on the stock. • Allows you to generate income from your holding. • Profit when underlying stock price rise, move sideways or marginal fall.