SHORT GUTS	STRAP
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..	Strap Option Strategy  Strap Strategy is similar to Long Straddle, the only difference is the quantity traded. A trader will buy two Call Options and one Put Options. In this strategy, a trader is very bullish on the market and volatility on upside but wants to hedge himself in case the stock doesn’t perform as per his expectations. This strategy will make more profits compared to long straddle sin .. Read more..

SHORT GUTS Vs STRAP - Details

	SHORT GUTS	STRAP
Market View	Neutral	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	3
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Profit Achieved When Price of Underlying > Strike Price of Calls/Puts + (Net Premium Paid/2) OR Price of Underlying < Strike Price of Calls/Puts - Net Premium Paid
Risk Profile	Unlimited	Max Loss Occurs When Price of Underlying = Strike Price of Calls/Puts
Breakeven Point	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received	Strike Price of Calls/Puts + (Net Premium Paid/2)

SHORT GUTS Vs STRAP - When & How to use ?

	SHORT GUTS	STRAP
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 used when the investor is bullish on the stock and expects volatility in the near future.
Action	Sell 1 ITM Call, Sell 1 ITM Put	Buy 2 ATM Call Option, Buy 1 ATM Put 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	Strike Price of Calls/Puts + (Net Premium Paid/2)

SHORT GUTS Vs STRAP - Risk & Reward

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

SHORT GUTS Vs STRAP - Strategy Pros & Cons

	SHORT GUTS	STRAP
Similar Strategies	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)	Strip, Short Put Ladder, Short Call Ladder
Disadvantage	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.	• To generate profit, there should be significant change in share price. • Expensive strategy.
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.	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.