LONG STRANGLE	SHORT GUTS
About Strategy	Long Strangle Option Strategy A Strangle is similar to Straddle. In Strangle, a trader will purchase one OTM Call Option and one OTM Put Option, of the same expiry date and the same underlying asset. This strategy will reduce the entry cost for trader and it is also cheaper than straddle. A trader will make profits, if the market moves sharply in either direction and gives extra-ordinary returns in 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..

LONG STRANGLE Vs SHORT GUTS - Details

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

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

	LONG STRANGLE	SHORT GUTS
Market View	Neutral	Neutral
When to use?	This strategy is used in special scenarios where you foresee a lot of volatility in the market due to election results, budget, policy change, annual result announcements etc.	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 OTM Call Option, Buy OTM Put Option	Sell 1 ITM Call, Sell 1 ITM Put
Breakeven Point	Lower Breakeven Point = Strike Price of Put - Net Premium, Upper Breakeven Point = Strike Price of Call + Net Premium	Upper Breakeven Point = Net Premium Received + Strike Price of Short Call, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received

LONG STRANGLE Vs SHORT GUTS - Risk & Reward

	LONG STRANGLE	SHORT GUTS
Maximum Profit Scenario	Profit = Price of Underlying - Strike Price of Long Call - Net Premium Paid	Net Premium Received + Strike Price of Short Put - Strike Price of Short Call - Commissions Paid
Maximum Loss Scenario	Max Loss = Net Premium 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

LONG STRANGLE Vs SHORT GUTS - Strategy Pros & Cons

	LONG STRANGLE	SHORT GUTS
Similar Strategies	Long Straddle, Short Strangle	Short Strangle (Sell Strangle), Short Straddle (Sell Straddle)
Disadvantage	• Require significant price movement to book profit. • Traders can lose more money if the underlying asset stayed stagnant.	• Unlimited potential loss if the underlying stock continues to move in one direction. • High margin required.
Advantages	• Able to book profit, no matter if the underlying asset goes in either direction. • Limited loss to the debit paid. • If the underlying asset continues to move in one direction then you can book Unlimited profit .	• 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.