COVERED COMBINATION	RATIO PUT SPREAD
About Strategy	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un Read more..	Ratio Put Spread Option Strategy  This strategy involves buying ITM Puts and simultaneously selling OTM Puts, double the number of ITM Puts. This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. Here profits will be capped up to the premium amount and risk will be potentially unlimited. Read more..

COVERED COMBINATION Vs RATIO PUT SPREAD - Details

	COVERED COMBINATION	RATIO PUT SPREAD
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	2	3
Strategy Level	Advance	Beginners
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)

COVERED COMBINATION Vs RATIO PUT SPREAD - When & How to use ?

	COVERED COMBINATION	RATIO PUT SPREAD
Market View	Bullish	Neutral
When to use?	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.	This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future.
Action	Sell 1 OTM Call, Sell 1 OTM Put	Buy 1 ITM Put, Sell 2 OTM Puts
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)

COVERED COMBINATION Vs RATIO PUT SPREAD - Risk & Reward

	COVERED COMBINATION	RATIO PUT SPREAD
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid	Strike Price of Long Put - Strike Price of Short Put + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid	Strike Price of Short - Price of Underlying - Max Profit + Commissions Paid
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED COMBINATION Vs RATIO PUT SPREAD - Strategy Pros & Cons

	COVERED COMBINATION	RATIO PUT SPREAD
Similar Strategies	Stock Repair Strategy	Short Straddle (Sell Straddle), Short Strangle (Sell Strangle)
Disadvantage	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.	• Unlimited potential risk. • Limited profit.
Advantages	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.	• Directional strategy so that there is either no upside or downside risk. • Able to profit even if trader is neutral on the market. • Higher probability of profit.