RATIO PUT SPREAD	COVERED 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..	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 PUT SPREAD Vs COVERED PUT - Details

	RATIO PUT SPREAD	COVERED PUT
Market View	Neutral	Bearish
Type (CE/PE)	PE (Put Option)	PE (Put Option) + Underlying
Number Of Positions	3	2
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
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)	Futures Price + Premium Received

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

	RATIO PUT SPREAD	COVERED PUT
Market View	Neutral	Bearish
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.	The Covered Put works well when the market is moderately Bearish.
Action	Buy 1 ITM Put, Sell 2 OTM Puts	Sell Underlying Sell OTM Put Option
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)	Futures Price + Premium Received

RATIO PUT SPREAD Vs COVERED PUT - Risk & Reward

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

RATIO PUT SPREAD Vs COVERED PUT - Strategy Pros & Cons

	RATIO PUT SPREAD	COVERED PUT
Similar Strategies	Short Straddle (Sell Straddle), Short Strangle (Sell Strangle)	Bear Put Spread, Bear Call Spread
Disadvantage	• Unlimited potential risk. • Limited profit.	• Limited profit, unlimited risk. • Trader should have enough experience before using this strategy.
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.	• 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.