PROTECTIVE CALL	RATIO CALL SPREAD
About Strategy	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 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 Vs RATIO CALL SPREAD - Details

	PROTECTIVE CALL	RATIO CALL SPREAD
Market View	Bearish	Neutral
Type (CE/PE)	CE (Call Option)	CE (Call Option)
Number Of Positions	1	3
Strategy Level	Beginners	Beginners
Reward Profile	Unlimited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Sale Price of Underlying + 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

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

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

PROTECTIVE CALL Vs RATIO CALL SPREAD - Risk & Reward

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

PROTECTIVE CALL Vs RATIO CALL SPREAD - Strategy Pros & Cons

	PROTECTIVE CALL	RATIO CALL SPREAD
Similar Strategies	Put Backspread, Long Put	Variable Ratio Write
Disadvantage	• Profitable when market moves as expected. • Not good for beginners.	• Unlimited potential loss. • Complex strategy with limited profit.
Advantages	• 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.	• 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.