COVERED COMBINATION	RATIO PUT WRITE
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 Write Option Strategy  This strategy is implemented by selling (short) the underlying asset in the cash/futures market. Simultaneously, sell ATM Puts double the number of long quantity. This strategy is used by a trader who in 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 WRITE - Details

	COVERED COMBINATION	RATIO PUT WRITE
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	PE (Put Option)
Number Of Positions	2	2
Strategy Level	Advance	Beginners
Reward Profile	Limited	Max Profit Achieved When Price of Underlying = Strike Price of Short Puts
Risk Profile	Unlimited	Loss Occurs When Price of Underlying < Strike Price of Short Put - Net Premium Received OR Price of Underlying > Strike Price of Short Put + Net Premium Received
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

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

	COVERED COMBINATION	RATIO PUT WRITE
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 implemented by selling (short) the underlying asset in the cash/futures market. This strategy is used by a trader who in neutral on the market and bearish on the volatility in the near future
Action	Sell 1 OTM Call, Sell 1 OTM Put	Sell 2 ATM Puts
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

COVERED COMBINATION Vs RATIO PUT WRITE - Risk & Reward

	COVERED COMBINATION	RATIO PUT WRITE
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid	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	Price of Underlying - Sale Price of Underlying - Net Premium Received OR Strike Price of Short Put - Price of Underlying - Net Premium Received + Commissions Paid
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED COMBINATION Vs RATIO PUT WRITE - Strategy Pros & Cons

	COVERED COMBINATION	RATIO PUT WRITE
Similar Strategies	Stock Repair Strategy	Short Strangle and Short Straddle
Disadvantage	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.	• Potential loss is higher than gain. • Limited profit.
Advantages	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.