RATIO PUT WRITE	SHORT GUTS
About Strategy	Ratio Put Write Option Strategy  This strategy is implemented by selling (short) the underlying asset in the cash/futures market. Simultaneously, sell ATM Puts double the number of long quantity. This strategy is used by a trader who in neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited. Read more..	Short Guts Option Strategy  This strategy is implemented by a trader when he is neutral on the movements and bearish on volatility i.e. he expects the stock to be range bound in the near future. This strategy involves sale of 1 ITM Call Option and 1 ITM Put Option. This strategy can be called as Credit Spread since his account is credited at the time of entering in the positions. < .. Read more..

RATIO PUT WRITE Vs SHORT GUTS - Details

	RATIO PUT WRITE	SHORT GUTS
Market View	Neutral	Neutral
Type (CE/PE)	PE (Put Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Beginners
Reward Profile	Max Profit Achieved When Price of Underlying = Strike Price of Short Puts	Limited
Risk Profile	Loss Occurs When Price of Underlying < Strike Price of Short Put - Net Premium Received OR Price of Underlying > Strike Price of Short Put + Net Premium Received	Unlimited
Breakeven Point	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

RATIO PUT WRITE Vs SHORT GUTS - When & How to use ?

	RATIO PUT WRITE	SHORT GUTS
Market View	Neutral	Neutral
When to use?	This strategy is implemented by selling (short) the underlying asset in the cash/futures market. This strategy is used by a trader who in neutral on the market and bearish on the volatility in the near future	This strategy is implemented by a trader when he is neutral on the movements and bearish on volatility i.e. he expects the stock to be range bound in the near future.
Action	Sell 2 ATM Puts	Sell 1 ITM Call, Sell 1 ITM Put
Breakeven Point	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

RATIO PUT WRITE Vs SHORT GUTS - Risk & Reward

	RATIO PUT WRITE	SHORT GUTS
Maximum Profit Scenario	Net Premium Received - Commissions Paid	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Net Premium Received OR Strike Price of Short Put - Price of Underlying - Net Premium Received + Commissions Paid	Price of Underlying - Strike Price of Short Call - Net Premium Received OR Strike Price of Short Put - Price of Underlying - Net Premium Received + Commissions Paid
Risk	Unlimited	Unlimited
Reward	Limited	Limited

RATIO PUT WRITE Vs SHORT GUTS - Strategy Pros & Cons

	RATIO PUT WRITE	SHORT GUTS
Similar Strategies	Short Strangle and Short Straddle	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage	• Potential loss is higher than gain. • Limited profit.	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.
Advantages		• Ability to profit even when underlying asset stays stagnant. • You are already paid your full profit the moment the position is put on as this is a credit spread position. • Higher chance of ending in full profit as compared to short strangle or short straddle.