RISK REVERSAL	LONG GUTS
About Strategy	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod 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..

RISK REVERSAL Vs LONG GUTS - Details

	RISK REVERSAL	LONG GUTS
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Beginners
Reward Profile	Unlimited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Premium received - Put Strike Price	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

RISK REVERSAL Vs LONG GUTS - When & How to use ?

	RISK REVERSAL	LONG GUTS
Market View	Bullish	Neutral
When to use?	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.	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	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.	Buy 1 ITM Call, Buy 1 ITM Put
Breakeven Point	Premium received - Put Strike Price	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

RISK REVERSAL Vs LONG GUTS - Risk & Reward

	RISK REVERSAL	LONG GUTS
Maximum Profit Scenario	You have unlimited profit potential to the upside.	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	You have nearly unlimited downside risk as well because you are short the put	Net Premium Paid + Strike Price of Long Put - Strike Price of Long Call + Commissions Paid
Risk	Unlimited	Limited
Reward	Unlimited	Unlimited

RISK REVERSAL Vs LONG GUTS - Strategy Pros & Cons

	RISK REVERSAL	LONG GUTS
Similar Strategies	-	Short Put Ladder, Strip, Strap
Disadvantage	Unlimited Risk.	• More commission involved than simply buying call or put option. • Expensive.
Advantages	Unlimited profit.	• 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.