COVERED PUT	RATIO PUT WRITE
About Strategy	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 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 PUT Vs RATIO PUT WRITE - Details

	COVERED PUT	RATIO PUT WRITE
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option) + Underlying	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	Futures Price + Premium Received	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 PUT Vs RATIO PUT WRITE - When & How to use ?

	COVERED PUT	RATIO PUT WRITE
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	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 Underlying Sell OTM Put Option	Sell 2 ATM Puts
Breakeven Point	Futures Price + Premium Received	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 PUT Vs RATIO PUT WRITE - Risk & Reward

	COVERED PUT	RATIO PUT WRITE
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Net Premium Received - Commissions Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	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 PUT Vs RATIO PUT WRITE - Strategy Pros & Cons

	COVERED PUT	RATIO PUT WRITE
Similar Strategies	Bear Put Spread, Bear Call Spread	Short Strangle and Short Straddle
Disadvantage	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.	• Potential loss is higher than gain. • Limited profit.
Advantages	• 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.