Compare Strategies
RATIO PUT WRITE | BULL PUT SPREAD | |
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About Strategy |
Ratio Put Write Option StrategyThis strategy is implemented by selling (short) the underlying asset in the cash/futures market. Simultaneously, sell ATM Puts double the number of long quantity. This strategy is used by a trader who in 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. |
Bull Put Spread Option StrategyBull Put Spread option trading strategy is used by a trader who is bullish in nature and expects the underlying asset to move in an upward trend in the near future. This strategy includes buying of an ‘Out of the Money’ Put Option and selling of ‘In the Money’ Put Option of the same underlying asset and the same expiration date. When you write a Put, you will receive prem .. |
RATIO PUT WRITE Vs BULL PUT SPREAD - Details
RATIO PUT WRITE | BULL PUT SPREAD | |
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Market View | Neutral | Bullish |
Type (CE/PE) | PE (Put Option) | PE (Put Option) |
Number Of Positions | 2 | 2 |
Strategy Level | Beginners | Advance |
Reward Profile | Max Profit Achieved When Price of Underlying = Strike Price of Short Puts | Limited |
Risk Profile | Loss Occurs When Price of Underlying < Strike Price of Short Put - Net Premium Received OR Price of Underlying > Strike Price of Short Put + Net Premium Received | Limited |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit | Strike price of short put - net premium paid |
RATIO PUT WRITE Vs BULL PUT SPREAD - When & How to use ?
RATIO PUT WRITE | BULL PUT SPREAD | |
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Market View | Neutral | Bullish |
When to use? | This strategy is implemented by selling (short) the underlying asset in the cash/futures market. This strategy is used by a trader who in neutral on the market and bearish on the volatility in the near future | Bull Put Spread strategy is used when you're of the view that the price of a particular underlying will rise, move sideways, or marginally fall. |
Action | Sell 2 ATM Puts | Buy OTM Put Option, Sell ITM Put Option |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Puts + Points of Maximum Profit Lower Breakeven Point = Strike Price of Short Puts - Points of Maximum Profit | Strike price of short put - net premium paid |
RATIO PUT WRITE Vs BULL PUT SPREAD - Risk & Reward
RATIO PUT WRITE | BULL PUT SPREAD | |
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Maximum Profit Scenario | Net Premium Received - Commissions Paid | Max Profit = Net Premium Received |
Maximum Loss Scenario | Price of Underlying - Sale Price of Underlying - Net Premium Received OR Strike Price of Short Put - Price of Underlying - Net Premium Received + Commissions Paid | Max Loss = (Strike Price Put 1 - Strike Price of Put 2) - Net Premium Received |
Risk | Unlimited | Limited |
Reward | Limited | Limited |
RATIO PUT WRITE Vs BULL PUT SPREAD - Strategy Pros & Cons
RATIO PUT WRITE | BULL PUT SPREAD | |
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Similar Strategies | Short Strangle and Short Straddle | Bull Call Spread, Bear Put Spread, Collar |
Disadvantage | • Potential loss is higher than gain. • Limited profit. | • Limited profit potential. • In loss situations, time decay may go against you. |
Advantages | • Benefit from the time decay in profit positions but harmful in loss positions. • Profitable when underlying stock price rises, move sideways or marginal drop. • Reduce the downside risk. |