Short Guts
Components
Sell one call option and sell one put option at a higher strike price.
Risk / Reward
Maximum Loss: Unlimited as the market moves in either direction.
Maximum Gain: Limited to the net premium received for selling the options.
Characteristics
A short guts has the same profile as a Short Strangle except a guts strategy involves ITM options, whereas a strangle trades OTM options.
Comments (2)
Joel
January 21st, 2009 at 3:47am
Depends on the premiums of both strategies. Guts would be more expensive as they are ITM options.
Deepak
January 19th, 2009 at 10:25am
how to make choice bet strangle and gut ?
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