PROTECTIVE PUT	RATIO PUT WRITE
About Strategy	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 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..

PROTECTIVE PUT Vs RATIO PUT WRITE - Details

	PROTECTIVE PUT	RATIO PUT WRITE
Market View	Bullish	Neutral
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	1	2
Strategy Level	Beginners	Beginners
Reward Profile	Unlimited	Max Profit Achieved When Price of Underlying = Strike Price of Short Puts
Risk Profile	Limited	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	Purchase Price of Underlying + Premium Paid	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

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

	PROTECTIVE PUT	RATIO PUT WRITE
Market View	Bullish	Neutral
When to use?	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.	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	Buy 1 ATM Put	Sell 2 ATM Puts
Breakeven Point	Purchase Price of Underlying + Premium Paid	Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit

PROTECTIVE PUT Vs RATIO PUT WRITE - Risk & Reward

	PROTECTIVE PUT	RATIO PUT WRITE
Maximum Profit Scenario	Price of Underlying - Purchase Price of Underlying - Premium Paid	Net Premium Received - Commissions Paid
Maximum Loss Scenario	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid	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	Limited	Unlimited
Reward	Unlimited	Limited

PROTECTIVE PUT Vs RATIO PUT WRITE - Strategy Pros & Cons

	PROTECTIVE PUT	RATIO PUT WRITE
Similar Strategies	Long Call, Call Backspread	Short Strangle and Short Straddle
Disadvantage	• 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.	• Potential loss is higher than gain. • Limited profit.
Advantages	• 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.