STRAP	LONG GUTS
About Strategy	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..	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..

STRAP Vs LONG GUTS - Details

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

STRAP Vs LONG GUTS - When & How to use ?

	STRAP	LONG GUTS
Market View	Neutral	Neutral
When to use?	This strategy is used when the investor is bullish on the stock and expects volatility in the near future.	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 2 ATM Call Option, Buy 1 ATM Put Option	Buy 1 ITM Call, Buy 1 ITM Put
Breakeven Point	Strike Price of Calls/Puts + (Net Premium Paid/2)	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

STRAP Vs LONG GUTS - Risk & Reward

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

STRAP Vs LONG GUTS - Strategy Pros & Cons

	STRAP	LONG GUTS
Similar Strategies	Strip, Short Put Ladder, Short Call Ladder	Short Put Ladder, Strip, Strap
Disadvantage	• To generate profit, there should be significant change in share price. • Expensive strategy.	• More commission involved than simply buying call or put option. • Expensive.
Advantages	• Limited loss. • If share prices are moving then traders can book unlimited profit. • A trader can still book profit if the underlying falls substantially.	• 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.