PROTECTIVE PUT	RATIO CALL 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 Call Write Option Strategy  This strategy involves buying of an underlying asset in the cash/futures market and simultaneously selling ATM Calls double the number of long quantity. 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..

PROTECTIVE PUT Vs RATIO CALL WRITE - Details

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

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

	PROTECTIVE PUT	RATIO CALL 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 used by a trader who is neutral on the market and bearish on the volatility in the near future.
Action	Buy 1 ATM Put	Sell 2 ATM Calls
Breakeven Point	Purchase Price of Underlying + Premium Paid	Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit

PROTECTIVE PUT Vs RATIO CALL WRITE - Risk & Reward

	PROTECTIVE PUT	RATIO CALL 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 - Strike Price of Short Call - Net Premium Received OR Purchase Price of Underlying - Price of Underlying - Net Premium Received + Commissions Paid
Risk	Limited	Unlimited
Reward	Unlimited	Limited

PROTECTIVE PUT Vs RATIO CALL WRITE - Strategy Pros & Cons

	PROTECTIVE PUT	RATIO CALL WRITE
Similar Strategies	Long Call, Call Backspread	Variable Ratio Write
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.