COVERED PUT	LONG 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..	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..

COVERED PUT Vs LONG GUTS - Details

	COVERED PUT	LONG 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	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Futures Price + Premium Received	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

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

	COVERED PUT	LONG 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 bullish on volatility i.e. he expects the stock to move in either direction with high magnitude.
Action	Sell Underlying Sell OTM Put Option	Buy 1 ITM Call, Buy 1 ITM Put
Breakeven Point	Futures Price + Premium Received	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

COVERED PUT Vs LONG GUTS - Risk & Reward

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

COVERED PUT Vs LONG GUTS - Strategy Pros & Cons

	COVERED PUT	LONG GUTS
Similar Strategies	Bear Put Spread, Bear Call Spread	Short Put Ladder, Strip, Strap
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• More commission involved than simply buying call or put option. • Expensive.
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.	• 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.