LONG GUTS	RISK REVERSAL
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..	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 Vs RISK REVERSAL - Details

	LONG GUTS	RISK REVERSAL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
Reward Profile	Unlimited	Unlimited
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	Premium received - Put Strike Price

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

	LONG GUTS	RISK REVERSAL
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.	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.
Action	Buy 1 ITM Call, Buy 1 ITM Put	This strategy work when an investor want to hedge their position by buying a put option and selling a 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	Premium received - Put Strike Price

LONG GUTS Vs RISK REVERSAL - Risk & Reward

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

LONG GUTS Vs RISK REVERSAL - Strategy Pros & Cons

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