PROTECTIVE CALL	SHORT GUTS
About Strategy	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The 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..

PROTECTIVE CALL Vs SHORT GUTS - Details

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

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

	PROTECTIVE CALL	SHORT GUTS
Market View	Bearish	Neutral
When to use?	This strategy is implemented when a trader is bearish on the market and expects to go down.	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	Buy 1 ATM Call	Sell 1 ITM Call, Sell 1 ITM Put
Breakeven Point	Sale Price of Underlying + Premium Paid	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

PROTECTIVE CALL Vs SHORT GUTS - Risk & Reward

	PROTECTIVE CALL	SHORT GUTS
Maximum Profit Scenario	Sale Price of Underlying - Price of Underlying - Premium Paid	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid
Maximum Loss Scenario	Premium Paid + Call Strike Price - Sale Price of Underlying + 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	Limited	Unlimited
Reward	Unlimited	Limited

PROTECTIVE CALL Vs SHORT GUTS - Strategy Pros & Cons

	PROTECTIVE CALL	SHORT GUTS
Similar Strategies	Put Backspread, Long Put	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage	• Profitable when market moves as expected. • Not good for beginners.	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.
Advantages	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.	• 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.