RATIO CALL WRITE	COVERED CALL
About Strategy	Ratio Call Write Option Strategy  This 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. 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 CALL WRITE Vs COVERED CALL - Details

	RATIO CALL WRITE	COVERED CALL
Market View	Neutral	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Unlimited	Unlimited
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 Received

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

	RATIO CALL WRITE	COVERED CALL
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.	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 Calls	(Buy Underlying) (Sell OTM Call 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 Received

RATIO CALL WRITE Vs COVERED CALL - Risk & Reward

	RATIO CALL 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 - Strike Price of Short Call - Net Premium Received OR Purchase Price of Underlying - Price of Underlying - Net Premium Received + Commissions Paid	Purchase Price of Underlying - Price of Underlying) + Premium Received
Risk	Unlimited	Unlimited
Reward	Limited	Limited

RATIO CALL WRITE Vs COVERED CALL - Strategy Pros & Cons

	RATIO CALL WRITE	COVERED CALL
Similar Strategies	Variable Ratio Write	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.