Compare Strategies
RATIO PUT WRITE | IRON CONDORS | |
---|---|---|
![]() |
![]() |
|
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. |
Iron Condors Option StrategyIron Condor is a neutral trading strategy. A trader tries to make profit from low volatility in the price of the underlying asset. This strategy will be better understood if you recall ‘Bull Put Spread’ & ‘Bear Call Spread’. A trader will buy one Deep OTM Put Option and sell one OTM Put Option,. He will also sell one OTM Call Option and buy one Deep OTM Call Option. .. |
RATIO PUT WRITE Vs IRON CONDORS - Details
RATIO PUT WRITE | IRON CONDORS | |
---|---|---|
Market View | Neutral | Neutral |
Type (CE/PE) | PE (Put Option) | CE (Call Option) + PE (Put Option) |
Number Of Positions | 2 | 4 |
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 | 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 = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received |
RATIO PUT WRITE Vs IRON CONDORS - When & How to use ?
RATIO PUT WRITE | IRON CONDORS | |
---|---|---|
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 | When a trader tries to make profit from low volatility in the price of the underlying asset. |
Action | Sell 2 ATM Puts | Sell 1 OTM Put, Buy 1 OTM Put (Lower Strike), Sell 1 OTM Call, Buy 1 OTM Call (Higher Strike) |
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 = Strike Price of Short Call + Net Premium Received, Lower Breakeven Point = Strike Price of Short Put - Net Premium Received |
RATIO PUT WRITE Vs IRON CONDORS - Risk & Reward
RATIO PUT WRITE | IRON CONDORS | |
---|---|---|
Maximum Profit Scenario | Net Premium Received - Commissions Paid | Net Premium Received - Commissions 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 | Strike Price of Long Call - Strike Price of Short Call - Net Premium Received + Commissions Paid |
Risk | Unlimited | Limited |
Reward | Limited | Limited |
RATIO PUT WRITE Vs IRON CONDORS - Strategy Pros & Cons
RATIO PUT WRITE | IRON CONDORS | |
---|---|---|
Similar Strategies | Short Strangle and Short Straddle | Long Put Butterfly, Neutral Calendar Spread |
Disadvantage | • Potential loss is higher than gain. • Limited profit. | • Full of risk. • Unlimited maximum loss. |
Advantages | • Chance to gather double premium. • Sure, maximum gains on one-half the trade. • Flexible and double leverage at half price. |