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The exact opposite trade of Long Guts: sell an in-the-money call and put with crossed strikes, collecting a large premium, with a flat profit zone instead of a flat loss zone — and undefined risk on either side.

Short Guts combines selling one in-the-money call and selling one in-the-money put, at two crossed strikes — the call's strike below the current price, the put's strike above it, same as Long Guts but sold instead of bought. Both options carry real intrinsic value, which is what makes the credit collected here so large compared to a comparable Short Strangle.

This is the exact reverse of Long Guts — sell where that strategy buys. The large premium collected reflects the real intrinsic value both options already carry.

The same flat-zone property Long Guts has, mirrored to a profit instead of a loss:

1. Between the two strikes — maximum profit, flat across the entire zone, for the same reason Long Guts has a flat loss zone there: the combined intrinsic value of the two legs is mathematically constant across this range.
2. Beyond either strike — loss grows as the underlying moves further in that direction, with no cap on either side.

Short Guts fits a view that the underlying will stay within a specific, relatively wide range through expiry — the profit zone here (between the two crossed strikes) is naturally wide, since both strikes were chosen to already be in-the-money. It's rarely a first choice given the undefined risk on both sides, and the large premium collected reflects that real risk, not free money.

Suppose Nifty is trading at 24,000 with a weekly expiry coming up, and lot size is 65. You expect it to stay within a fairly wide range.

1. Confirm the setup. You expect Nifty to stay roughly between 23,700 and 24,300.
2. Sell 1 call at the 23,700 strike (in-the-money), collecting a premium of 420.
3. Sell 1 put at the 24,300 strike (in-the-money), collecting a premium of 380.
4. Calculate the net credit: 420 + 380 = 800 points, or ₹52,000 at this lot size.
5. Understand the flat profit zone: anywhere between 23,700 and 24,300, the profit is a constant ₹13,000.
6. Calculate the breakevens: 23,500 on the downside, and 24,500 on the upside.
7. See how it resolves at expiry:
   • Nifty finishes anywhere between 23,700 and 24,300 → flat profit of ₹13,000.
   • Nifty finishes at either breakeven → you exactly break even.
   • Nifty finishes well beyond either breakeven → a loss that keeps growing, with no cap on either side.

Quick reference for the same trade:

Based on the worked example above — the mirror image of the Long Guts page's diagram. Move the cursor over the chart to see profit/loss at any price.

• Loss is genuinely undefined on both sides — the large credit collected reflects real risk, not free premium.
• Margin requirements are typically very high, reflecting both the undefined risk and the large notional value of the in-the-money options involved.
• Index options on NSE are typically European-style and cash-settled — no early-assignment risk on either short leg before expiry.