RATIO PUT SPREAD	PROTECTIVE PUT
About Strategy	Ratio Put Spread Option Strategy  This strategy involves buying ITM Puts and simultaneously selling OTM Puts, double the number of ITM Puts. 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..	Protective Put Option Strategy Protective Put Strategy is a hedging strategy where trader guards himself from the downside risk. This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside. He will buy one ATM Put Option to hedge his position. Now, if the underlying asset moves either up or down, the trader is in a safe position. Read more..

RATIO PUT SPREAD Vs PROTECTIVE PUT - Details

	RATIO PUT SPREAD	PROTECTIVE PUT
Market View	Neutral	Bullish
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	3	1
Strategy Level	Beginners	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)	Purchase Price of Underlying + Premium Paid

RATIO PUT SPREAD Vs PROTECTIVE PUT - When & How to use ?

	RATIO PUT SPREAD	PROTECTIVE PUT
Market View	Neutral	Bullish
When to use?	This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future.	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Buy 1 ITM Put, Sell 2 OTM Puts	Buy 1 ATM Put
Breakeven Point	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)	Purchase Price of Underlying + Premium Paid

RATIO PUT SPREAD Vs PROTECTIVE PUT - Risk & Reward

	RATIO PUT SPREAD	PROTECTIVE PUT
Maximum Profit Scenario	Strike Price of Long Put - Strike Price of Short Put + Net Premium Received - Commissions Paid	Price of Underlying - Purchase Price of Underlying - Premium Paid
Maximum Loss Scenario	Strike Price of Short - Price of Underlying - Max Profit + Commissions Paid	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

RATIO PUT SPREAD Vs PROTECTIVE PUT - Strategy Pros & Cons

	RATIO PUT SPREAD	PROTECTIVE PUT
Similar Strategies	Short Straddle (Sell Straddle), Short Strangle (Sell Strangle)	Long Call, Call Backspread
Disadvantage	• Unlimited potential risk. • Limited profit.	• Value of protective put position decreases as time passes • Holding period of the protective put can be affected by the timing as a result tax rate on the profit or loss from the stock can be affected.
Advantages	• Directional strategy so that there is either no upside or downside risk. • Able to profit even if trader is neutral on the market. • Higher probability of profit.	• Unlimited potential profit due to indefinitely rise in the underlying stock price . • This strategy allows you to hold on to your stocks while insuring against losses. • Hedging strategy, trader can guard himself from the downside risk.