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+Ratio Call Writing 
+Two basic types of call writing have been described in previous chapters: covered call 
+writing, in which one owns the underlying stock and sells a call; and naked call writ­
+ing. Ratio writing is a combination of these two types of positions. 
+THE RATIO WRITE 
+Simply stated, ratio call writing is the strategy in which one owns a certain number 
+of shares of the underlying stock and sells calls against more shares than he owns. 
+Thus, there is a ratio of calls written to stock owned. The most common ratio is the 
+2:1 ratio, whereby one owns 100 shares of the underlying stock and sells 2 calls. Note 
+that this type of position involves writing a number of naked call options as well as a 
+number of covered options. This resulting position has both downside risk, as does a 
+covered write, and unlimited upside risk, as does a naked write. The ratio write gen­
+erally wilI provide much larger profits than either covered writing or naked writing if 
+the underlying stock remains relatively unchanged during the life of the calls. 
+However, the ratio write has two-sided risk, a quality absent from either covered or 
+naked writing. 
+Generally, when an investor establishes a ratio write, he attempts to be neutral 
+in outlook regarding the underlying stock. This means that he writes the calls with 
+striking prices closest to the current stock price. 
+Example: A ratio write is established by buying 100 shares of XYZ at 49 and selling 
+two XYZ October 50 calls at 6 points each. If XYZ should decline in price and be 
+anywhere below 50 at October expiration, the calls will expire worthless and the 
+writer will make 12 points from the sale of the calls. Thus, even if XYZ drops 12 
+points to a price of 37, the ratio writer will break even. The stock loss of 12 points 
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