Sell one call option and sell one put option at a higher strike price.
Maximum Loss: Unlimited as the market moves in either direction.
Maximum Gain: Limited to the net premium received for selling the options.
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 (7)
Peter
June 12th, 2011 at 7:09am
By "expensive" I meant that the options have higher prices.
Swissguy
June 11th, 2011 at 10:47pm
You said GUTS would be more expensive but why do you say that when you are selling? That only makes it more attractive because you get paid more premium.
madhu
February 27th, 2011 at 12:44pm
use full information
Arun007
November 29th, 2010 at 1:02am
Thanks for the information
Anonymous
November 3rd, 2010 at 5:59am
Thanks for the post
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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