SHORT CALL	LONG GUTS
About Strategy	Short Call Option Strategy A trader shorts or writes a Call Option when he feels that underlying stock price is likely to go down. Selling Call Option is a strategy preferred for experienced traders. However this strategy is very risky in nature. If the stock rallies on the upside, your risk becomes potentially unquantifiable and unlimited. If the strategy 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..

SHORT CALL Vs LONG GUTS - Details

	SHORT CALL	LONG GUTS
Market View	Bearish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	1	2
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Strike Price of Short Call + Premium Received	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

SHORT CALL Vs LONG GUTS - When & How to use ?

	SHORT CALL	LONG GUTS
Market View	Bearish	Neutral
When to use?	It is an aggressive strategy and involves huge risks. It should be used only in case where trader is certain about the bearish market view on the underlying.	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	Sell or Write Call Option	Buy 1 ITM Call, Buy 1 ITM Put
Breakeven Point	Strike Price of Short Call + Premium Received	Upper Breakeven Point = Net Premium Paid + Strike Price of Long Call, Lower Breakeven Point = Strike Price of Long Put - Net Premium Paid

SHORT CALL Vs LONG GUTS - Risk & Reward

	SHORT CALL	LONG GUTS
Maximum Profit Scenario	Max Profit = 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	Loss Occurs When Price of Underlying > Strike Price of Short Call + Premium Received	Net Premium Paid + Strike Price of Long Put - Strike Price of Long Call + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

SHORT CALL Vs LONG GUTS - Strategy Pros & Cons

	SHORT CALL	LONG GUTS
Similar Strategies	Covered Put, Covered Calls	Short Put Ladder, Strip, Strap
Disadvantage	• Unlimited risk to the upside underlying stocks. • Potential loss more than the premium collected.	• More commission involved than simply buying call or put option. • Expensive.
Advantages	• With the help of this strategy, traders can book profit from falling prices in the underlying asset. • Less investment, more profit. • Traders can book profit when underlying stock price fall, move sideways or rise by a small amount.	• 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.