LONG GUTS	COVERED CALL
About Strategy	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 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..

LONG GUTS Vs COVERED CALL - Details

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

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

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

LONG GUTS Vs COVERED CALL - Risk & Reward

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

LONG GUTS Vs COVERED CALL - Strategy Pros & Cons

	LONG GUTS	COVERED CALL
Similar Strategies	Short Put Ladder, Strip, Strap	Bull Call Spread
Disadvantage	• More commission involved than simply buying call or put option. • Expensive.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages	• 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.	• 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.