RISK REVERSAL	RATIO CALL SPREAD
About Strategy	Risk Reversal Option Strategy This strategy protects an investor from unfavourable price movements in the position but limits the profits can be made on that position. A risk reversal is a hedging strategy that protects a long or short position by using put and call options. In this one option is buying and other is written. In this strategy the trader has to pay a premium, while the written option prod Read more..	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..

RISK REVERSAL Vs RATIO CALL SPREAD - Details

	RISK REVERSAL	RATIO CALL SPREAD
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	3
Strategy Level	Advance	Beginners
Reward Profile	Unlimited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Premium received - Put Strike Price	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

RISK REVERSAL Vs RATIO CALL SPREAD - When & How to use ?

	RISK REVERSAL	RATIO CALL SPREAD
Market View	Bullish	Neutral
When to use?	This strategy can be used for hedging. When an investor want to protect long or short position by using a call and put option.	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.
Action	This strategy work when an investor want to hedge their position by buying a put option and selling a call option.	Buy 1 ITM Call, Sell 2 OTM Calls
Breakeven Point	Premium received - Put Strike Price	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

RISK REVERSAL Vs RATIO CALL SPREAD - Risk & Reward

	RISK REVERSAL	RATIO CALL SPREAD
Maximum Profit Scenario	You have unlimited profit potential to the upside.	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid
Maximum Loss Scenario	You have nearly unlimited downside risk as well because you are short the put	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid
Risk	Unlimited	Unlimited
Reward	Unlimited	Limited

RISK REVERSAL Vs RATIO CALL SPREAD - Strategy Pros & Cons

	RISK REVERSAL	RATIO CALL SPREAD
Similar Strategies	-	Variable Ratio Write
Disadvantage	Unlimited Risk.	• Unlimited potential loss. • Complex strategy with limited profit.
Advantages	Unlimited profit.	• 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.