COVERED CALL	LONG GUTS
About Strategy	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 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 Vs LONG GUTS - Details

	COVERED CALL	LONG GUTS
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	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	Purchase Price of Underlying- 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 CALL Vs LONG GUTS - When & How to use ?

	COVERED CALL	LONG GUTS
Market View	Bullish	Neutral
When to use?	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.	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	(Buy Underlying) (Sell OTM Call Option)	Buy 1 ITM Call, Buy 1 ITM Put
Breakeven Point	Purchase Price of Underlying- 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 CALL Vs LONG GUTS - Risk & Reward

	COVERED CALL	LONG GUTS
Maximum Profit Scenario	[Call Strike Price - Stock Price Paid] + Premium Received	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	Purchase Price of Underlying - 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 CALL Vs LONG GUTS - Strategy Pros & Cons

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