LONG PUT	RATIO CALL SPREAD
About Strategy	Long Put Option Strategy This strategy is implemented by buying 1 Put Option i.e. a single position, when the person is bearish on the market and expects the market to move downwards in the near future. Risk: The maximum loss will be the premium amount paid.< 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..

LONG PUT Vs RATIO CALL SPREAD - Details

	LONG PUT	RATIO CALL SPREAD
Market View	Bearish	Neutral
Type (CE/PE)	PE (Put Option)	CE (Call Option)
Number Of Positions	1	3
Strategy Level	Beginners	Beginners
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Strike Price of Long Put - Premium Paid	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

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

	LONG PUT	RATIO CALL SPREAD
Market View	Bearish	Neutral
When to use?	A long put option strategy works well when you're expecting the underlying asset to sharply decline or be volatile in near future.	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	Buy Put Option	Buy 1 ITM Call, Sell 2 OTM Calls
Breakeven Point	Strike Price of Long Put - Premium Paid	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

LONG PUT Vs RATIO CALL SPREAD - Risk & Reward

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

LONG PUT Vs RATIO CALL SPREAD - Strategy Pros & Cons

	LONG PUT	RATIO CALL SPREAD
Similar Strategies	Protective Call, Short Put	Variable Ratio Write
Disadvantage	• 100% loss if strike price, expiration dates or underlying stocks are badly chosen. • Time decay.	• Unlimited potential loss. • Complex strategy with limited profit.
Advantages	• Limited risk to the premium paid. • Less capital investment and more profit. • Unlimited profit potential with limited risk.	• 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.