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Gut spread
A strategy that combines the simultaneous purchase or sale of the same number of in-the-money call options and put options with the same features as regards the underlying and the expiration date, but with different exercise prices.
This strategy is similar to a strangle, the only difference being that, in the case of a strangle, the options purchased or sold are out of the money and the premium paid or received is lower.
Translations
Synonyms and variations
- Gut strangle
- Guts
- In-the-money strangle