RATIO CALL SPREAD	COVERED PUT
About Strategy	Ratio Call Spread Option Strategy  As the name suggests, a ratio of 2:1 is followed i.e. buy 1 ITM Call and simultaneously sell OTM Calls double the number of ITM Calls (In this case 2). This strategy is used by 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 since he is Read more..	Covered Put Option Strategy  This strategy is exactly opposite to Covered Call Strategy. Here the investor is neutral or moderately bearish in nature and wants to take advantage of the price fall in the near future. The trader will short one lot of stock future. Now the trader will short ATM Put Option, the option strike price will be his exit price. If the prices rally above the strike price, the .. Read more..

RATIO CALL SPREAD Vs COVERED PUT - Details

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

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

	RATIO CALL SPREAD	COVERED PUT
Market View	Neutral	Bearish
When to use?	This strategy is used by 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 since he is selling two calls.	The Covered Put works well when the market is moderately Bearish.
Action	Buy 1 ITM Call, Sell 2 OTM Calls	Sell Underlying Sell OTM Put Option
Breakeven Point	Upper Breakeven Point = Strike Price of Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received	Futures Price + Premium Received

RATIO CALL SPREAD Vs COVERED PUT - Risk & Reward

	RATIO CALL SPREAD	COVERED PUT
Maximum Profit Scenario	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid	The profit happens when the price of the underlying moves above strike price of Short Put.
Maximum Loss Scenario	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid	Price of Underlying - Sale Price of Underlying - Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

RATIO CALL SPREAD Vs COVERED PUT - Strategy Pros & Cons

	RATIO CALL SPREAD	COVERED PUT
Similar Strategies	Variable Ratio Write	Bear Put Spread, Bear Call Spread
Disadvantage	• Unlimited potential loss. • Complex strategy with limited profit.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
Advantages	• Downside risk is almost zero. • Investors can book profit from share prices moving within given limits. • Trader can maximise profit when the share closes at the upper breakeven point.	• Investors can book profit when underlying stock price drop, move sideways or rises by a small amount. • Able to generate monthly income. • Able to generate profit from fall in prices or mild increase in the prices.