RATIO PUT WRITE	PROTECTIVE PUT
About Strategy	Ratio Put Write Option Strategy  This 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. Read more..	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 PUT WRITE Vs PROTECTIVE PUT - Details

	RATIO PUT WRITE	PROTECTIVE PUT
Market View	Neutral	Bullish
Type (CE/PE)	PE (Put Option)	PE (Put Option)
Number Of Positions	2	1
Strategy Level	Beginners	Beginners
Reward Profile	Max Profit Achieved When Price of Underlying = Strike Price of Short Puts	Unlimited
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	Purchase Price of Underlying + Premium Paid

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

	RATIO PUT WRITE	PROTECTIVE PUT
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	This strategy is adopted when a trader is long on the underlying asset but skeptical of the downside.
Action	Sell 2 ATM Puts	Buy 1 ATM Put
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	Purchase Price of Underlying + Premium Paid

RATIO PUT WRITE Vs PROTECTIVE PUT - Risk & Reward

	RATIO PUT WRITE	PROTECTIVE PUT
Maximum Profit Scenario	Net Premium Received - Commissions Paid	Price of Underlying - Purchase Price of Underlying - Premium Paid
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	Premium Paid + Purchase Price of Underlying - Put Strike + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

RATIO PUT WRITE Vs PROTECTIVE PUT - Strategy Pros & Cons

	RATIO PUT WRITE	PROTECTIVE PUT
Similar Strategies	Short Strangle and Short Straddle	Long Call, Call Backspread
Disadvantage	• Potential loss is higher than gain. • Limited profit.	• 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.
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.