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4.5. Guts

ProficiencyDirectionVolatilityAsset LegsMax RiskMax RewardStrategy Type
+
ExpertNeutralHigh• Long CallCappedUncappedCapital Gain
   • Long Put   


4.5.1. Description

The Guts is a simple adjustment to the Strangle, but this adjustment makes it more expensive. Instead of buying OTM options, we buy ITM calls and puts, which creates a higher cost basis. As with the Strangle, the risk we run with a Guts is that the breakevens can be pushed further apart than with a Straddle.


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