SHORT GUTS	IRON BUTTERFLY
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..	Iron Butterfly Option Strategy  This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements. A trader will buy 1 OTM Put Option, sell 1 ATM Put Option, sell 1 ATM Call Option, buy 1 OTM Call Option. Due to offsetting of long and short positions, this strategy bags limited profit with limited risk. Read more..

SHORT GUTS Vs IRON BUTTERFLY - Details

	SHORT GUTS	IRON BUTTERFLY
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	4
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Limited
Breakeven Point	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

SHORT GUTS Vs IRON BUTTERFLY - When & How to use ?

	SHORT GUTS	IRON BUTTERFLY
Market View	Neutral	Neutral
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.	This strategy is implemented when a trader is bearish on the volatility of market and neutral on the market movements.
Action	Sell 1 ITM Call, Sell 1 ITM Put	Buy 1 OTM Put, Sell 1 ATM Put, Sell 1 ATM Call, Buy 1 OTM Call
Breakeven Point	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Upper Breakeven Point = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

SHORT GUTS Vs IRON BUTTERFLY - Risk & Reward

	SHORT GUTS	IRON BUTTERFLY
Maximum Profit Scenario	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid	Net Premium Received - Commissions Paid
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	Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Limited

SHORT GUTS Vs IRON BUTTERFLY - Strategy Pros & Cons

	SHORT GUTS	IRON BUTTERFLY
Similar Strategies	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)	Long Put Butterfly, Neutral Calendar Spread
Disadvantage	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.	• Large commissions involved. • Probability of losses are higher.
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.	• Less amount of capital investment, steady income with low risk. • Traders can predict maximum loss and profit. • Versatile strategy, investors can transform position into bear call spread or bull put spread easily.