RATIO CALL SPREAD	PROTECTIVE CALL
About Strategy	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..	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The .. Read more..

RATIO CALL SPREAD Vs PROTECTIVE CALL - Details

	RATIO CALL SPREAD	PROTECTIVE CALL
Market View	Neutral	Bearish
Type (CE/PE)	CE (Call Option)	CE (Call 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 Short Calls + (Points of Maximum Profit / Number of Uncovered Calls), Lower Breakeven Point = Strike Price of Long Call +/- Net Premium Paid or Received	Sale Price of Underlying + Premium Paid

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

	RATIO CALL SPREAD	PROTECTIVE CALL
Market View	Neutral	Bearish
When to use?	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.	This strategy is implemented when a trader is bearish on the market and expects to go down.
Action	Buy 1 ITM Call, Sell 2 OTM Calls	Buy 1 ATM Call
Breakeven Point	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	Sale Price of Underlying + Premium Paid

RATIO CALL SPREAD Vs PROTECTIVE CALL - Risk & Reward

	RATIO CALL SPREAD	PROTECTIVE CALL
Maximum Profit Scenario	Strike Price of Short Call - Strike Price of Long Call + Net Premium Received - Commissions Paid	Sale Price of Underlying - Price of Underlying - Premium Paid
Maximum Loss Scenario	Price of Underlying - Strike Price of Short Calls - Max Profit + Commissions Paid	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

RATIO CALL SPREAD Vs PROTECTIVE CALL - Strategy Pros & Cons

	RATIO CALL SPREAD	PROTECTIVE CALL
Similar Strategies	Variable Ratio Write	Put Backspread, Long Put
Disadvantage	• Unlimited potential loss. • Complex strategy with limited profit.	• Profitable when market moves as expected. • Not good for beginners.
Advantages	• 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.	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.