COVERED CALL	RATIO PUT SPREAD
About Strategy	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 Spread Option Strategy  This strategy involves buying ITM Puts and simultaneously selling OTM Puts, double the number of ITM Puts. 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. Read more..

COVERED CALL Vs RATIO PUT SPREAD - Details

	COVERED CALL	RATIO PUT SPREAD
Market View	Bullish	Neutral
Type (CE/PE)	CE (Call Option)	PE (Put Option)
Number Of Positions	2	3
Strategy Level	Advance	Beginners
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
Breakeven Point	Purchase Price of Underlying- Premium Received	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)

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

	COVERED CALL	RATIO PUT SPREAD
Market View	Bullish	Neutral
When to use?	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.	This strategy is used by a trader who is neutral on the market and bearish on the volatility in the near future.
Action	(Buy Underlying) (Sell OTM Call Option)	Buy 1 ITM Put, Sell 2 OTM Puts
Breakeven Point	Purchase Price of Underlying- Premium Received	Upper Breakeven Point = Strike Price of Long Put +/- Net Premium Received or Paid, Lower Breakeven Point = Strike Price of Short Puts - (Points of Maximum Profit / Number of Uncovered Puts)

COVERED CALL Vs RATIO PUT SPREAD - Risk & Reward

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

COVERED CALL Vs RATIO PUT SPREAD - Strategy Pros & Cons

	COVERED CALL	RATIO PUT SPREAD
Similar Strategies	Bull Call Spread	Short Straddle (Sell Straddle), Short Strangle (Sell Strangle)
Disadvantage	• Unlimited risk, limited reward. • Inability to earn interest on the proceed used to buy the underlying stock.	• Unlimited potential risk. • Limited profit.
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.	• Directional strategy so that there is either no upside or downside risk. • Able to profit even if trader is neutral on the market. • Higher probability of profit.