COVERED PUT	RATIO CALL SPREAD
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 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..

COVERED PUT Vs RATIO CALL SPREAD - Details

	COVERED PUT	RATIO CALL SPREAD
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option) + Underlying	CE (Call Option)
Number Of Positions	2	3
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 / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received

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

	COVERED PUT	RATIO CALL SPREAD
Market View	Bearish	Neutral
When to use?	The Covered Put works well when the market is moderately Bearish.	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	Sell Underlying Sell OTM Put Option	Buy 1 ITM Call, Sell 2 OTM Calls
Breakeven Point	Futures Price + Premium Received	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

COVERED PUT Vs RATIO CALL SPREAD - Risk & Reward

	COVERED PUT	RATIO CALL SPREAD
Maximum Profit Scenario	The profit happens when the price of the underlying moves above strike price of Short Put.	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Price of Underlying - Sale Price of Underlying - Premium Received	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid
Risk	Unlimited	Unlimited
Reward	Limited	Limited

COVERED PUT Vs RATIO CALL SPREAD - Strategy Pros & Cons

	COVERED PUT	RATIO CALL SPREAD
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.	• Unlimited potential loss. • Complex strategy with 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.	• 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.