Compare Strategies
RATIO PUT WRITE | SHORT CALL LADDER | |
---|---|---|
![]() |
![]() |
|
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. |
Short Call Ladder Option StrategyThis strategy is implemented when a trader is moderately bullish on the market, and volatility. It involves sale of an ITM Call Option, buying of an ATM Call Option & OTM Call Option. The risk associated with the strategy is limited. Risk:
|
RATIO PUT WRITE Vs SHORT CALL LADDER - Details
RATIO PUT WRITE | SHORT CALL LADDER | |
---|---|---|
Market View | Neutral | Neutral |
Type (CE/PE) | PE (Put Option) | CE (Call Option) |
Number Of Positions | 2 | 3 |
Strategy Level | Beginners | Advance |
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 | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
RATIO PUT WRITE Vs SHORT CALL LADDER - When & How to use ?
RATIO PUT WRITE | SHORT CALL LADDER | |
---|---|---|
Market View | Neutral | Neutral |
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 implemented when a trader is moderately bullish on the market, and volatility |
Action | Sell 2 ATM Puts | Sell 1 ITM Call, Buy 1 ATM Call, Buy 1 OTM Call |
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 | Upper Breakeven Point = Total Strike Prices of Long Calls - Strike Price of Short Call + Net Premium Received Lower Breakeven Point = Strike Price of Short Call - Net Premium Received |
RATIO PUT WRITE Vs SHORT CALL LADDER - Risk & Reward
RATIO PUT WRITE | SHORT CALL LADDER | |
---|---|---|
Maximum Profit Scenario | Net Premium Received - Commissions Paid | Profit Achieved When Price of Underlying > Total Strike Prices of Long Calls - Strike Price of Short Call + 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 | Strike Price of Lower Strike Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Limited | Unlimited |
RATIO PUT WRITE Vs SHORT CALL LADDER - Strategy Pros & Cons
RATIO PUT WRITE | SHORT CALL LADDER | |
---|---|---|
Similar Strategies | Short Strangle and Short Straddle | Short Put Ladder, Strip, Strap |
Disadvantage | • Potential loss is higher than gain. • Limited profit. | • Unlimited risk. • Margin required. |
Advantages | • Higher probability of profit. • Unlimited upside profit. • Limited maximum loss. |