COVERED PUT	RATIO CALL 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 Call Write Option Strategy  This strategy involves buying of an underlying asset in the cash/futures market and simultaneously selling ATM Calls double the number of long quantity. 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 PUT Vs RATIO CALL WRITE - Details

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

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

	COVERED PUT	RATIO CALL WRITE
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future.
Action	Sell Underlying Sell OTM Put Option	Sell 2 ATM Calls
Breakeven Point	Futures Price + Premium Received	Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit

COVERED PUT Vs RATIO CALL WRITE - Risk & Reward

	COVERED PUT	RATIO CALL 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 - Strike Price of Short Call - Net Premium Received OR Purchase Price of Underlying - Price of Underlying - Net Premium Received + Commissions Paid
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED PUT Vs RATIO CALL WRITE - Strategy Pros & Cons

	COVERED PUT	RATIO CALL WRITE
Similar Strategies	Bear Put Spread, Bear Call Spread	Variable Ratio Write
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.