RATIO PUT WRITE	COVERED CALL
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..	Covered Call Option Strategy Mr. X owns Reliance Shares and expects the price to rise in the near future. Mr. X is entitled to receive dividends for the shares he hold in cash market. Covered Call Strategy involves selling of OTM Call Option of the same underlying asset. The OTM Call Option Strike Price will generally be the price, where Mr. X will look to get out o .. Read more..

RATIO PUT WRITE Vs COVERED CALL - Details

	RATIO PUT WRITE	COVERED CALL
Market View	Neutral	Bullish
Type (CE/PE)	PE (Put Option)	CE (Call 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	Unlimited
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 Received

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

	RATIO PUT WRITE	COVERED CALL
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	An investor has a short term neutral view on the asset and for this reason holds the asset long and has a short position to generate income.
Action	Sell 2 ATM Puts	(Buy Underlying) (Sell OTM Call 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	Purchase Price of Underlying- Premium Received

RATIO PUT WRITE Vs COVERED CALL - Risk & Reward

	RATIO PUT WRITE	COVERED CALL
Maximum Profit Scenario	Net Premium Received - Commissions Paid	[Call Strike Price - Stock Price Paid] + 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	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

RATIO PUT WRITE Vs COVERED CALL - Strategy Pros & Cons

	RATIO PUT WRITE	COVERED CALL
Similar Strategies	Short Strangle and Short Straddle	Bull Call Spread
Disadvantage	• Potential loss is higher than gain. • Limited profit.	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.
Advantages		• Profit from option premium, rise in the underlying stock and dividends on the stock. • Allows you to generate income from your holding. • Profit when underlying stock price rise, move sideways or marginal fall.