Compare Strategies
RATIO CALL WRITE | MARRIED PUT | |
---|---|---|
![]() |
![]() |
|
About Strategy |
Ratio Call Write Option StrategyThis strategy involves buying of an underlying asset in the cash/futures market and simultaneously selling ATM Calls double the number of long quantity. This strategy is used by a 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. |
Married Put Option StrategyThis strategy is applied when trader goes long on the underlying asset i.e. he buys the stock in cash market. He has a bullish view and expects the market to rise in the near future, but simultaneously has the fear of downward movement of the markets. In order to cover his position from vulnerabilities he buys one ATM Put Option of the same underlying asset. Here, a trader wi .. |
RATIO CALL WRITE Vs MARRIED PUT - Details
RATIO CALL WRITE | MARRIED PUT | |
---|---|---|
Market View | Neutral | Bullish |
Type (CE/PE) | CE (Call Option) | PE (Put Option) |
Number Of Positions | 2 | 1 |
Strategy Level | Beginners | Beginners |
Reward Profile | Limited | Unlimited |
Risk Profile | Unlimited | Limited |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit | Purchase Price of Underlying + Premium Paid |
RATIO CALL WRITE Vs MARRIED PUT - When & How to use ?
RATIO CALL WRITE | MARRIED PUT | |
---|---|---|
Market View | Neutral | Bullish |
When to use? | This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future. | This Strategy work when the investor goes long in any stock. He expects the rise in market in future. |
Action | Sell 2 ATM Calls | Buy 250 XYZ Shares, Buy 1 ATM Put Option |
Breakeven Point | Upper Breakeven Point = Strike Price of Short Calls + Points of Maximum Profit, Lower Breakeven Point = Strike Price of Short Calls - Points of Maximum Profit | Purchase Price of Underlying + Premium Paid |
RATIO CALL WRITE Vs MARRIED PUT - Risk & Reward
RATIO CALL WRITE | MARRIED PUT | |
---|---|---|
Maximum Profit Scenario | Net Premium Received - Commissions Paid | Profit = Price of Underlying - Purchase Price of Underlying - Premium Paid |
Maximum Loss Scenario | Price of Underlying - Strike Price of Short Call - Net Premium Received OR Purchase Price of Underlying - Price of Underlying - Net Premium Received + Commissions Paid | Max Loss = Premium Paid + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Limited | Unlimited |
RATIO CALL WRITE Vs MARRIED PUT - Strategy Pros & Cons
RATIO CALL WRITE | MARRIED PUT | |
---|---|---|
Similar Strategies | Variable Ratio Write | Long Call |
Disadvantage | • Potential loss is higher than gain. • Limited profit. | Cost of the put options eats into profit margin. |
Advantages | Unlimited Profit and Limited Risk |