A Long Guts is buying one call option and buying a put option with a higher strike price in the same expiration month.
The Max Loss is limited to the total premium received for the call and put options.
The Max Gain is uncapped as the market moves in either direction.
When to use: When you are bullish on volatility but are unsure of market direction.
A long guts has the same profile as a Long Strangle. The difference is that with a guts you only buy ITM options. A strangle you buy OTM options.